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In Richard Denny v HMRC [2013] TC02714 a director was caught out by the benefits code. His company had paid for improvements to his property and he had used the company’s yacht. HMRC raised an assessment to tax the benefits received.

This was a long judgment concerning an investigation over many years including other areas of dispute which the tribunal was required to deal with following the breakdown in relations between HMRC's officer and the taxpayer. This summary only considers the benefits element.

Improvements to property

The taxpayer granted his own company a licence to build an office block for the purposes of carrying out its trading activities on the taxpayer’s land.

The yacht

The taxpayers’s company purchased a yacht and it was let out commercially on limited occasions.

As a result it arrived at the following figures:

Useful guidance on this theme:

Directors: converting part of your house into your office or trading premises
Many of us work from home, and it would be pleasant to obtain tax relief on the cost of converting the spare room, or building a deluxe summerhouse to serve as an office in the garden...More

Links: Richard Denny V HMRC