Availability of cars and fuel to directors

The directors of HSL Ltd leased cars. The lease agreements were between the car companies and HSL Ltd but all costs for the vehicles were borne by the directors through their loan accounts. The taxpayers argued that by virtue of an oral and de facto implied arrangement between the company and the directors the property had passed to the latter so ITEPA 2003 s 114(1)(a) was not satisfied. Further the directors paid for all the costs including fuel so there was no benefit in kind.

HMRC said the cars were made available to the directors by reason of their employment without any transfer of the property in them and they were available for private use. Similarly the directors did not reimburse the company for fuel. It raised assessments and penalties for inaccuracies in their returns. The department also raised determinations on HSL Ltd to collect...