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A medical consultant owns two cars that are used for business purposes. His wife, who assists in the business and receives a £15,000 salary, is insured to drive these cars and HMRC are contending that a car benefit arises on one of them
My client is a specialist medical consultant. He is a sole trader for tax purposes and is highly paid. His payroll includes his wife on a salary of about £15 000 a year.
Two cars are claimed for through his business accounts and in view of his particular client bank he has purchased one upmarket sports car and a more practical everyday saloon car. Both vehicles are subject to capital allowance claims and motoring expense claims with the appropriate private use adjustment agreed at 40% in each case.
Coincidentally our client’s wife is insured to drive these vehicles. HMRC have now asserted that in view of the fact that she is insured to drive these vehicles a benefit in kind arises upon her by virtue of the more expensive sports car being made available for her use as part and parcel of her employment.
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