The Commissioners for HM Revenue and Customs v Apollo Fuels Limited and Others Brian Edwards and Others
| Jurisdiction | UK Non-devolved |
| Judge | Mrs Justice Rose |
| Subject Matter | Tax,26 February 2014 |
| Court | Upper Tribunal (Tax and Chancery Chamber) |
| Date | 26 February 2014 |
| Published date | 01 December 2016 |
1
[2014] UKUT 0095 (TCC)
FTC/42/2013
UPPER TRIBUNAL
(TAX AND CHANCERY CHAMBER)
BETWEEN: THE COMMISSIONERS FOR HER MAJESTY’ S
REVENUE AND CUSTOMS Appellants
- and –
(1) APOLLO FUELS LIMITED and others
(2) BRIAN EDWARDS and others Respondents
Income tax – car leased to employee – mileage allowance payments – whether lease
arrangement falling within section 114 Income Tax (Earnings and Pensions) Act
2003 – application of sections 114(3) and 62 ITEPA - whether National Insurance
Contributions payable on car – whether car is a ‘company vehicle’ for the purpose of
section 236(2) ITEPA
TRIBUNAL: The Hon Mrs Justice Rose
Sitting in public in London on 4 and 5 February 2014
David Yates instructed by the General Counsel and Solicitor to HM Revenue and
Customs for the Appellants
Rory Mullan and Oliver Marre instructed by GBAC Ltd for the Respondents
© CROWN COPYRIGHT 2014
2
DECISION
The appeal of the Commissioners for Her Majesty’s Revenue and Customs IS
DISMISSED
REASONS
Introduction
1. This is an appeal from the decision of the First-tier Tribunal (Tax Chamber)
dated 12 December 2012 (Judge David Demack and Ann Christian). In that
decision the Tribunal determined that the arrangements entered into by a
group of companies to provide cars to their employees and to pay them
mileage allowances did not give rise to any liability to tax. The Tribunal also
overturned HMRC’s assessment that National Insurance Contributions
(‘NICs’) were payable in respect of the use of the cars provided and on the
payments made in respect of mileage allowances.
2. The corporate Respondents to this appeal are six companies in the Newell &
Wright group. That group carries on a variety of trades and businesses
including the distribution of fuel oils, transport contracting, tanker
manufacturing fabrication and sales, freight forwarding and haulage, and
vehicle hire and sales. I shall refer to the corporate Respondents as ‘the
Group’.
3. The Group historically provided cars to salesmen and managers employed by
its subsidiaries both as a perquisite of their employment and to enable them to
carry out their duties. The cars were mainly second-hand and purchased at
auction. The duties of the employees concerned included visiting new and
existing customers and suppliers, delivering freight to customers, travelling
between various company sites and visiting the companies’ banks,
accountants, etc. The annual business mileage of each of the employees
concerned varied between 5,000 and 25,000 miles.
4. From 6 April 2002 there was a change in the law relating to the taxation of the
provision of company cars to employees. Before that date, employees were
charged to income tax as if a sum equal to 35 per cent of the value of the car
when new was added to their income, but the charge was reduced to 25 per
cent for employees who travelled more than 2,000 business miles in the year,
and to 15 per cent for those who travelled more than 18,000 business miles.
Further, if the car were four or more years old, the tax charge was reduced by
one quarter.
5. Following the change, there was no longer any reduction in the charge to tax
based on the extent of an employee’s business travel or for the age of the car.
Instead employees were charged to tax in the sum of 15 per cent (since
To continue reading
Request your trial