Cars are not co-owned

The employees of a company leased cars from their employer. Following a PAYE audit visit HMRC said that the provision of the cars had not been reported properly and ITEPA 2003 s 114 applied.

The cars were benefits in kind: the scale benefits applied for both the cars and fuel provided and the employer was liable for National Insurance.

The taxpayers appealed on the basis that the cars were not made available to them by their employer because of the leasing arrangement.

Referring to the decision in Christensen v Vasili [2004] STC 93 in which a car jointly owned by the employee and employer was considered to be made available to the employee the First-tier Tribunal said on that basis it followed that the same could be said for a lessor/lessee relationship.

It noted that HMRC agreed...