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12 March 2013
P Marshall (TC2466)
The taxpayer was assessed to income tax on a company car under ITEPA 2003, s 121. He appealed, saying under s 144 no benefit was due because he paid the company the equivalent amount for the private use of the vehicle.
HMRC said s 144 could be called into play only if the payment by the taxpayer in respect of the car was made in the same year as when the benefit arose. In this instance, the taxpayer made the payment in 2010/11 and asked that it be used to offset the value of the car benefit in 2007/08 and 2008/09.
The First-tier Tribunal reviewed s 144 and ruled there was nothing in the legislation that prevented the taxpayer’s payment being set off against the taxable in s 121.
The taxpayer’s appeal was allowed.
