A trading LLP is owned 99% by an individual and 1% by a company. The company is owned in full by the same individual.
Other than the stake in the LLP, the company does not have any activity.
A car is owned by the LLP and used both for business and personal by the individual.
Is this now considered to be a company car, by virtue that the company owns part of it and will the individual be required to report and pay tax on the full benefit?!
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Is it provided "by reason of his employment with the company" ?
On the basis of what you say, I'm guessing not, but feel free to offer some facts.
No employment by the company as such.
They are the only director, however but there will be no payroll scheme
Given the company has no activity in its own right, and that the car is owned by the LLP it would be difficult to argue that the car is provided as a benefit in kind to the director.
The private use proportion of the costs of the car should, however, be disallowed in the tax comp of the LLP, giving a similar effect to a hypothetical bik charge.
Thanks for the replies. I concur too but rang our tax helpline for confirmation and they suggested that it would be caught!! It would be incredibly harsh given the circumstances!
Ask your tax helpline to direct you to the legislation and or HMRC guidance on which they based their answer.
Share that with us... For comments and discussion.
I agree with frankfx. Your support line might have a point - and I too would be happy to join in the discussion on that point, once you have shared it.