New queries, issue 4638

Used car?

When is a company car unavailable for tax purposes?

My client is in dispute with HMRC over whether a car was available to a director who holds a small minority of the shares in a family-owned company.

For many years he has used an expensive car for which the benefit in kind had been properly declared on form PIID and all tax and National Insurance paid. Then the company decided that the tax cost of providing the car was too high and withdrew the benefit.

An agreement was drawn up in writing forbidding the director from using the car. He returned the keys which were put in a safe to which he did not have access. The car was parked permanently outside the director’s home which was in a private estate with security gates. The company did not sell the car immediately but when its...