In Aegis Vision Limited and Sanjay Agarwal [2019] TC7038 the provision of a chauffeur and car was a taxable benefit despite some efforts to ensure that the chauffeur was self employed and providing car services in that capacity.
- The company's director Mr Agarwal and his wife do not drive.
- The company provided a chauffeur and car for the use of the director via a leasing scheme.
- HMRC raised an income tax assessment for Company car and fuel benefit and Employer's Class 1A.
The company claimed there is no taxable benefit because:
- Its Mercedes car is leased to the Chauffeur for him to use in his business as he chooses and that the Mercedes is therefore under his control at all times.
- The Mercedes can only be made available by the Chauffeur in these circumstances and that these arrangements effectively prohibit the car being made available by Aegis.
- The director reimbursed the Chauffeur personal for fuel.
HMRC submitted that these non-commercial arrangements do in fact result in Aegis making the Mercedes available to Mr Agarwal.
The FTT found that the lease arrangement are without commercial justification.
- Aegis leased the car for £1,640 pm and rented it to the chauffeur for £200 pcm. Instead of simply insuring the Chauffeur as the named driver of the Mercedes.
- The company paid for a public carriage office licence for the chauffeur to use the Mercedes in his mini cab business, however he did not use it for his mini-business.
- The chauffeur holds the keys and he is the only insured driver and he told HMRC that he does not use the Mercedes to transport fare paying passengers.
- There was no evidence to show that Mr Agarwal repaid the Chauffeur for private fuel.
The fact that Mr and Mrs Agarwal do not drive was raised repeatedly by them.
The FTT dismissed the appeal finding that an asset is made available or placed at the disposal of the employee or director.
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