In GR Solutions v HMRC [2013] UKUT 0278 (TCC) a car is treated as “made available" for the purposes of the benefits rules even when it is the employee who purchases the car and then sells an interest in it to his employer but continues to have private use of the car following that transfer.

If a car is “made available” to the employee within s 114 of the Income Tax (Earnings and Pensions) Act 2003 (“ITEPA”) then Class 1A national insurance contributions are due on the car benefit and the car fuel benefit, the cash equivalent of which is determined under ITEPA.

The Upper Tier Tax Tribunal (UTT), confirmed the First Tier Tribunals’ decision, agreeing with HMRC that it was immaterial how the co-ownership between employee and employer was brought about.

It does not matter whether:

  • the employer makes the initial outright purchase and transfers a fractional interest to the employee (Vasili), or
  • the employer and employee purchase jointly (Samson) or, 
  • as in GR Solutions, the employee makes the initial purchase and transfers a partial share to the employer.

In each case, on each occasion the employee uses the car during the currency of the joint ownership, the employer makes the car available to the employee.