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In Smallman & Sons Limited, Lisa Garrity & Brian Garrity v HMRC [2021] TC8242, the First Tier Tribunal (FTT) held that Income Tax and Class 1A National Insurance was due on cars leased by the employer company but paid for by the directors using them. There was no carelessness, so the four-year time limit applied and some liabilities and penalties fell out of charge.

Over a period of several years Smallman & Sons Ltd (SSL) had acquired four second-hand cars on lease-purchase agreements.

The FTT partially allowed the appeal. Class 1A NIC’s and Income Tax were due up until SSL paid the option fee to acquire the cars, and where assessments had been issued within the four-year time limit. Penalties issued outside the four-year time limit were discharged.

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External link

Smallman & Sons Limited, Lisa Garrity & Brian Garrity v HMRC [2021] TC8242


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