Availability of car for director’s private use

A was the director of Aegis a wholesale trader. In 2010 the company decided to engage a chauffeur. He was also a mini-cab driver. In 2012 it leased a car for the chauffeur to drive A as required but said it was for use in his mini-cab business.

HMRC decided A was liable to tax and National Insurance for the car and car fuel. Further the company was liable to class 1A National Insurance.

The taxpayers appealed. They said the car was leased to the chauffeur for him to use in his business as he chose and was therefore always under his control.

The First-tier Tribunal said that under ITEPA 2003 s 114 car benefit charges applied to a vehicle that was ‘made available’. It was difficult to find any ‘commercial justification’ for the arrangement described by the taxpayers. In practice the chauffeur used the car...