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Where Taxpayers and Advisers Meet

Company car for wife

Jimbo69
Posts:6
Joined:Fri Aug 18, 2017 4:26 pm
Company car for wife

Postby Jimbo69 » Thu Mar 15, 2018 6:55 pm

As a director of a small ltd co, could the company provide my wife, who works for the same company but only on a small salary, with an expensive car? We are happy to pay the BIK tax on her but don't want it assessing on me. Does s169 ITEPA 2003 give us the answer we are after?

Thanks for any comments

bd6759
Posts:4262
Joined:Sat Feb 01, 2014 3:26 pm

Re: Company car for wife

Postby bd6759 » Fri Mar 16, 2018 12:20 am

Not necessarily.

If it would not be normal for a person in your wife's position to be given an expensive car, then HMRC might say that it is not being made available by reason of her employment, and therefore she is not liable under s120.

In such circumstances, the company could not claim any of the costs as an expense because they would not be incurred wholly and exclusively for the purposes of the trade.

If you had any use of the car, HMRC would argue that it was also available to you.

SteLacca
Posts:448
Joined:Fri Aug 07, 2015 2:17 pm

Re: Company car for wife

Postby SteLacca » Fri Mar 16, 2018 10:42 am

HMRC could attempt to make a case that the car is made available by reason of his position regardless of whether or not he has use of it, and so may still charge him to a BIK. (Oddly, I'm handling a large employer compliance review at the moment where this very issue is pertinent).

wamstax
Posts:2019
Joined:Wed Aug 06, 2008 3:39 pm
Location:Operate Nationally but based in Aberdeen
Contact:

Re: Company car for wife

Postby wamstax » Fri Mar 16, 2018 11:06 am

If other employees on similar duties and remuneration do not receive a like benefit then clearly it is only by reason of the husbands employment (or shareholding) that the vehicle is made available and therefore assessable in hom
regards and hope this helps
http://www.wamstaxltd.com
Operates Nationally with competitive costs
and email and phone contact (mob 07751720507) can be obtained from websites

Jimbo69
Posts:6
Joined:Fri Aug 18, 2017 4:26 pm

Re: Company car for wife

Postby Jimbo69 » Fri Mar 16, 2018 1:50 pm

But doesn't s117 ITEPA state that, in this scenario, the car IS made available by reason of the employment?

SteLacca
Posts:448
Joined:Fri Aug 07, 2015 2:17 pm

Re: Company car for wife

Postby SteLacca » Fri Mar 16, 2018 5:41 pm

You may want to have a look at http://financeandtax.decisions.tribunals.gov.uk/judgmentfiles/j10092/TC06123.pdf para 95.

bd6759
Posts:4262
Joined:Sat Feb 01, 2014 3:26 pm

Re: Company car for wife

Postby bd6759 » Fri Mar 16, 2018 11:12 pm

But doesn't s117 ITEPA state that, in this scenario, the car IS made available by reason of the employment?
Not in this scenario, because it seems clear that car is being made available by the husband, not by the employer.

Jimbo69
Posts:6
Joined:Fri Aug 18, 2017 4:26 pm

Re: Company car for wife

Postby Jimbo69 » Tue Mar 20, 2018 5:30 pm

Do you feel It would make any difference if the car was genuinely used almost exclusively (perhaps 75%) by the wife? Isn't there provision to split the benefit where the car is made available to more than one person?


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