In Timothy Norton & Tim Norton Motor Services Ltd v HMRC [2023] UKUT 00048, the Upper Tribunal (UT) found that cars were made available to a director and subject to Benefit In Kind charges despite being untaxed and a declared   SORN.

  • Tim Norton Motor Services Limited (Company), a motor trader, purchased a rare Maserati in 2001 and a Ford GT40 in 2005.
  • P11Ds were prepared, declaring a Car Benefit as there had been private use of the vehicles for some years.
  • Following a Pay-As-You-Earn (PAYE) audit in 2016, HMRC concluded that the cars had been ‘made available’ to its director so car benefits were also received in further periods.
  • HMRC made tax and NICs determinations and Discovery Assessments for the years 2010/11 to 2016/17.

The Company’s Appeal to the First Tier Tribunal (FTT) was dismissed.

The Company appealed to the UT who found that:

  • The FTT had not erred in law in finding that the cars were made available for private use as:
    • The FTT correctly considered that a vehicle having a SORN did not restrict the availability of the cars as it could easily be revoked by paying the associated vehicle excise duty.
    • The FTT correctly concluded that Mrs Norton generally consented to Mr Norton’s private use of the cars as required by the Company handbook.
    • The Company handbook requirement to tax the car prior to use was a pre-requisite of using the vehicles, it was not a restriction to their use as Mr Norton could simply take the necessary step of taxing the vehicle prior to use.
  • The 2016-17 discovery assessment had not been validly issued as:
    • The discovery assessment had been issued within the enquiry window so did not meet the legislative conditions.
  • No closure notice had been issued for the 2015-16 tax year as the correspondence had not confirmed:
    • That HMRC had completed their enquiry.
    • The conclusions of the enquiry.
    • Whether an amendment was required to the return under enquiry.

The appeal was dismissed in part.

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.

Discovery Assessments: At a glance (freeview)
What is a Discovery Assessment? When can HMRC make a Discovery? What are the time limits for Discovery Assessment?

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?

How to appeal an HMRC decision
Disagree with an HMRC decision? How to appeal, what type of decision can you appeal and what are your different options when you disagree with HMRC? What are the key steps in making an appeal?

Sports show cars were available for private use
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.

External links

Timothy Norton & Tim Norton Motor Services Ltd v HMRC [2023] UKUT 00048


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