Odds on the taxpayer

The taxpayer company appealed against HMRC’s decision that it was liable to pay Class 1A National Insurance in respect of racehorses made available as a benefit to the employee (H).

The employee subsequently appealed against an assessment charging him tax on the benefit of the racehorse being made available to him for his personal use.

The First-tier Tribunal directed that the appeals be heard together.

It was accepted that H and his wife were 90% shareholders of the company which dealt in the sale and hire of heavy plant to the construction industry.

The company also acquired racehorses although H had no interest in racing and rarely attended race meetings. H said he received no personal benefit from the company’s ownership of the horses although it did provide a useful talking point with some of the company’s customers...