...Birthday boy; Favoured buyer
Car claims
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...