In Tim Norton Motor Services v HMRC [2020] TC7973, the fact that a Maserati and Ford GT40 had a Statutory Off-Road Notice (SORN) and management permission was required for any private use, were not sufficient as restrictions to prevent private use and a taxable car benefit applied.

The First Tier Tribunal (FTT) found that:

The company claimed that there was no benefit as the cars were not made available for private use:

The FTT concluded that neither SORN nor management permission meant any real restriction on private use. The potential or actual user of the car can easily remove the SORN restriction and restraint imposed by the employer’s handbook would not be effective.

The FTT did agree, on the basis of the evidence provided that the GT40 was only used for business in the years 2011/12 to 2012/13 and allowed that aspect of the appeal.

There were various procedural aspects of the appeal including challenges to the Closure Notice and whether assessments were validly made. 

HMRC had made a Discovery Assessment to allow it to assess earlier years outside of normal time limits. The company tried to counter the discovery on various counts; one argument put forward was that the company had acted in accordance with practice prevailing at the time. The FTT held that the burden of proof lay on the taxpayer to provide evidence of any prevailing practice. The company submitted that HMRC had changed its interpretation of 'made available'. Circumstantial evidence presented included an article in a tax magazine and letters from HMRC to the company in previous PAYE visits. These were not enough to persuade the FTT and it dismissed that argument. 

Useful guides on this topic

Company Cars
Company car tax: How do you work out car benefit? How do you work out car fuel benefit? Are there savings for low emissions vehicles? How do you reduce car benefit? Cars and the tax tribunals and Top Tax Tips.

Vans and Commercial vehicles
What is the benefit in kind charge if you drive a company van? What is van fuel benefit? What is the tax on zero-emissions vans? A guide for subscribers.

Car or Van for VAT
What is a car for VAT? What is a van for VAT? What VAT can be recovered on a car that is bought? Leased? What about fuel? Or mileage reimbursements? 

Discovery Assessments
When can HMRC issue an assessment outside of the normal statutory time limits? What conditions must be met? What are your rights of appeal and defences?

Appeals
How to appeal a decision of HMRC, what to check, time limits and useful practical tips and advice.

External links

Tim Norton Motor Services v HMRC [2020] TC7973


Squirrel ad


Are you enjoying our content? 

Thousands of accountants and advisers and their clients use www.rossmartin.co.uk as their primary TAX resource.

Register with us now to receive our receive our FREE SME Topical Tax Update & newletter