In MWL International Ltd and Maywal Ltd v HMRC [2024] TC09169 a HMRC inspector agreed a company pool car policy with an employing company, subsequently HMRC changed its view and raised a NICs assessment. On appeal the First Tier Tribunal (FTT) found that HMRC cannot be estopped from enforcing the law. The representation made by the inspector was invalid as the inspector had no legal authority to enter into an agreement relating to the future tax treatment of the cars.

Pool cars

  • Mr Walpole founded MWL International Ltd and Maywall Ltd and is a Director of both companies.
  • In a meeting between Mr Walpole and an HMRC inspector, the inspector made a representation as to what was required for a car to be a qualifying Pool car, provided specific conditions were met.
  • This representation was relied upon by the taxpayers. 
  • HMRC later determined that the cars were not pool cars and issued Decision notices for significant Class 1 A NIC liabilities.
  • The taxpayers Appealed the assessments, contending that the cars did satisfy the definition of pool cars, and even if they did not, HMRC should be 'estopped' in law from arguing that the cars were not pool cars.

The FTT found that:

  • The cars did not qualify as pool cars because:
    • One of the cars failed almost all statutory conditions. 
    • Although the other pool cars were kept on the premises (the registered office) of the companies that made them available, they did not meet the definition of pool cars because their private use was more than merely incidental; the dominant purpose of the journeys was private.
  • The principles of estoppel by convention, as set out in Tinkler v HMRC [2021] were satisfied.
  • HMRC were not estopped from retrospectively changing the representation made at the meeting because:
    • HMRC cannot be estopped from enforcing a statutory provision.
    • The inspector had no authority to enter into a forward agreement relating to the taxpayer's tax or National Insurance position. The agreement was therefore void as regards the future. 

 The FTT dismissed the appeals. 

Useful guides on this topic

Pool cars
What is a pool car? How is it taxed? When does it become a benefit? What are the rules? Is it still worth having them?

P11Ds: Employers' checklist & top tips
Top Tips for employers on preparing form P11D together with a checklist.

Closure notices
When does HMRC issue a Closure Notice? Can a taxpayer demand one? Are there appeal rights?

How to appeal an HMRC decision
Disagree with a 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?

Closure notice invalid: notice of enquiry not validly served (Court of Appeal decision)
In William Tinkler v HMRC [2019] EWCA 1392 the Court of Appeal ruled that a notice of an enquiry sent to a tax agent was not validly served on a taxpayer; the subsequent closure notice was also invalid.

Notice of enquiry can be validly served via an agent (Upper Tribunal decision)
In William Tinkler v HMRC [2018] UKUT 0073 the Upper Tribunal (UT) decided that a copy of notice of an enquiry under section 9A TMA 1970 sent to a tax agent was validly served on a taxpayer.

External Links

MWL International Ltd and Maywal Ltd v HMRC [2024] TC09169