In Harrison Solway Logistics Ltd v HMRC [2019] TC06956 the First Tier Tribunal allowed appeals against Benefit in Kind charges for company cars where the directors repaid the leasing costs of those cars to the company.

The case related to tax years 2010/11 to 2013/14 when the applicable legislation, ITEPA 2003 s114, directed that the cash equivalent of the benefit should be treated as earnings. 

The company leased cars which were provided to two directors, and also paid for private fuel. 

The lease and fuel costs were posted to to the directors' overdrawn loan accounts.

HMRC sought to charge a benefit in kind on the directors on the grounds that:

The company argued that:

The tribunal agreed with the company:


The tribunal also mentioned that if there had been a car benefit, they would not have found that the loan account deductions amounted to payments for private use: there was no evidence that the company had required the directors to make these payments or, that they were in fact for private use. 

This case may have little bearing in the future as following the Apollo Fuels Ltd case changes were made to legislation to remove the reference to the benefit of the car and to clarify that there is no requirement for the any benefit to actually transfer to the employee in order for a benefit in kind charge to arise.

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Company cars and Car fuel benefit charges


Harrison Solway Logistics Ltd v HMRC [2019] TC06956

Apollo Fuels Ltd v HMRC