In MWL International Ltd and Maywal Ltd v HMRC [2026] UKUT 00062, the Upper Tribunal (UT) upheld the First Tier Tribunal's (FTT's) decision that National Insurance Contributions (NICs) were payable on the misreporting of 'pool cars' for Benefit In Kind purposes.
Mr Walpole founded the trading companies MWL International Ltd and Maywall Ltd and was a Director of both.
- During a PAYE audit meeting between Mr Walpole and HMRC in 1993, an agreement was made as to what was required for a car to be a qualifying Pool car.
- The conditions included the cars being used for business, being available to multiple employees and being kept overnight at the company's registered office.
- This agreement was relied upon by the taxpayers for over 25 years, and no car Benefits In Kind were reported.
- HMRC later determined that the cars were not pool cars and issued Decision notices for significant Class 1A National Insurance Contributions (NICs).
- 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 First Tier Tribunal (FTT) found that:
- The cars did not qualify as pool cars.
- While the principles of estoppel were satisfied, HMRC could not be estopped from enforcing statutory provisions.
- The agreement was deemed void for future application, meaning estoppel could not be based on it.
- It lacked jurisdiction to determine the legitimate expectation based on the 1993 agreement.
- The appellants argued they had a legitimate expectation that HMRC would not apply NICs retrospectively based on the agreement.
The FTT dismissed the appeals, and with its permission, the taxpayers appealed against the decision.
- There was no appeal against the FTT's finding that the cars were not pool cars.
The Upper Tribunal (UT):
- Agreed with the FTT that the principles of estoppel by convention were satisfied.
- Upheld the FTT's decision that HMRC could not be estopped from enforcing statutory provisions, as estoppel cannot override mandatory legal obligations.
- The 1993 agreement between the appellants and HMRC was deemed void for future tax years, as the inspector lacked authority to make such an agreement.
- Agreed with the FTT that it lacked jurisdiction to decide the appellants' claim of legitimate expectation that HMRC would not retrospectively change the 1993 agreement.
- Concluded that even if jurisdiction existed, the legitimate expectation claim would fail because the 1993 agreement did not adequately reflect the statutory requirements and HMRC's actions were not 'conspicuously unfair'.
The appeal was dismissed.
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?
External link
MWL International Ltd and Maywal Ltd v HMRC [2026] UKUT 00062