Readers’ forum: Is company entitled to corporate tax relief?

Seeking relief

A client company’s only source of income is its profit share from the trading LLP it is a member of; the LLP carries out medical services. The company owns an electric car used by the director for personal use and for a very small amount in connection with the LLP’s trade – thus a benefit in kind arises for which the director pays the company. The company also incurs accountancy fees for preparation of its statutory accounts and corporation tax return.

I am concerned as to whether the company is entitled to corporation tax relief for the (non-LLP) car costs and accountancy fees given the company doesn’t have its own separate trade or any other activity other than being an LLP member.

HMRC’s Company Taxation Manual at CTM36510 Step 3 says ‘the company’s share is brought into charge under CTA09/S2 as if its profit share derived from...