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Nautical dough

12 November 2008
Issue: 4184 / Categories: Forum & Feedback
A pizza franchise purchased a yacht used for chartering and by the company directors. The Employment Income Manual and ITEPA 2003, s 205 are reviewed to ascertain exactly what is meant by 'availability' for private use and how the chargeable benefit in kind for the use of a company asset should be calculated

We have been approached by a new client who operates a successful pizza franchise under a sub-licence granted by the main franchisor in the UK. This is operated under the umbrella of a limited company and that company has acquired a boat which has been used by directors occasionally for their own pleasure. However in order to ensure as far as possible that the running costs are recovered it is also chartered out to third parties which provides an income source.

Obviously there are times when the boat is neither used by the directors or third parties and our concern revolves around whether the benefit charge in relation to each director would be based on actual use or availability for use.

Readers' comments would be most welcome on any negotiating tips with HMRC that may have worked for their clients in similar situations. Naturally we wish...

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