In Mark Holmes & Trudie Holmes v HMRC (2015) TC04467 the failure to prohibit the private use of company vehicles led to a director being assessed for employee benefits for five company cars.



  • Mr & Mrs Holmes are the director and employee respectively of KMS Logistics (UK) Ltd.
  • The company owned 7 prestige cars, which were used to visit clients/potential clients, take them to lunch etc. and present a stylish image to assist in maintaining and attracting new business.
  • Up to 2002, these cars had been declared as benefits in kind on the tax returns, however this ceased from 2003/04.
  • The company still owned the cars, however the director was unsure who owned the cars.
  • HMRC argued the cars were still available for personal use and in the absence of any prohibition on such use, the benefit was assessable.
  • As Mrs Holmes was a lower paid employee (earning less than £8,500 p.a.) HMRC raised assessments on her husband.
  • Mileage logs were kept in respect of two of the cars, which indicated they were mainly used by two other employees.


  • The tribunal found that there was no effective prohibition of private use in place throughout the years under consideration. It considered Gilbert v Hemsley 55 TC 419 which had established that the required prohibition need not be in writing. In the Holmes’ case there was no suggestion that any verbal prohibition existed, it was not claimed by the appellant.
  • The director did not claim that the cars were pool cars.

The FTT decided that was likely that, on the balance of probabilities, there had been private use of five cars by Mr and Mrs Holmes during the period whilst two cars where company cars of other employees.



In this case it seems that the director was unaware of the rules for pooled vehicles and it seems unlikely that the tribunal would have been impressed by the director's apparent lack of knowledge as to who really owned the cars. Perhaps he was providing cars for his family? The lower paid benefit threshold is removed from 6 April 2016 and so in 2016/17 his wife would have paid a tax charge too.


Holmes v HMRC

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