Private use confusion

The appellant taxpayers were the owner-MD of KMS Logistics (UK) Ltd and his wife an employee of the company which was run from a barn at their home

The business owned seven cars that had been used by the couple and other members of staff between 2003/04 and 2005/06.

A dispute with HMRC arose over the private use of the vehicles. The taxpayers denied it had occurred but acknowledged in answer to a hypothetical question that the cars might have been used for such a purpose.

The First-tier Tribunal said it seemed the husband was aware of neither the need to avoid private use nor that there needed to be a complete prohibition on such use.

He did not seem sure as to who owned the vehicles apparently believing at one stage that he owned them personally.

The tribunal concluded that private use was not...