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On 6 April 2005, X Limited, a family-owned trading company, purchased a new car which was made available to Mr X for private use and is intended to be replaced after three years. The £52,000 purchase price included the full cost of three years' servicing which otherwise would have cost £3,000.
On 5 April 2006, Mr X purchased the car from X Limited for its full market value and has charged for business mileage at the approved mileage allowance rates, thereby avoiding the 35% scale charge and fuel benefits which applied for 2005-06.
On 6 April 2005 X Limited a family-owned trading company purchased a new car which was made available to Mr X for private use and is intended to be replaced after three years. The £52 000 purchase price included the full cost of three years' servicing which otherwise would have cost £3 000.
On 5 April 2006 Mr X purchased the car from X Limited for its full market value and has charged for business mileage at the approved mileage allowance rates thereby avoiding the 35% scale charge and fuel benefits which applied for 2005-06.
For both 2006-07 and 2007-08 it would appear that Mr X is chargeable to tax on £1 000 in respect of the annual cost of car servicing incurred by X Limited on 6 April 2005 on the basis that the 'benefit' does not become available to him until the servicing...
Please reach out to customer services at +44 (0) 330 161 1234 or 'customer.services@lexisnexis.co.uk' for further assistance.
