Apollo Fuels Ltd & Ors v Revenue & Customs [2013] UKFTT 350 (TC) (12 December 2012)

Apollo Fuels Ltd & Ors v Revenue & Customs [2013] UKFTT 350 (TC) (12 December 2012)

The tribunal held that the car leases created proprietary rights in the cars for employees, amounting to a transfer of property, and that employees paid full market value for the leases. Therefore, the car benefit charge under ITEPA 2003 did not apply. Any benefit was taxable as earnings under s.62 ITEPA, but as full value was paid, no taxable benefit arose. Consequently, the mileage allowance exemption applied, and there was no liability to income tax or NICs on the arrangements.

Citation
[2013] UKFTT 350
Parties
First Appellants: Apollo Fuels Ltd and Others; Second Appellants: Brian Edwards and Others; Respondents: The Commissioners for Her Majesty’s Revenue & Customs
Jurisdiction
United Kingdom
Judgment Date
12 December 2012
Procedural Posture
Appeal (first Tier Tribunal Tax) / Final Judgment
Outcome
Appeal allowed in full
Legal Topics
Income Tax, Corporation Tax, Employment Income, Taxable Benefits, Company Cars, Mileage Allowances, National Insurance Contributions (nics)
Tax Law Employment Law Income Tax Corporation Tax Employment Income Taxable Benefits Company Cars Mileage Allowances +1 more

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 4 Authorities cited 15 Party arguments 2
Sign in to unlock

Parties

Apollo Fuels Ltd and Others

First Appellants

Brian Edwards and Others

Second Appellants

The Commissioners for Her Majesty’s Revenue & Customs

Respondents

Procedural Posture

Appeal (first Tier Tribunal Tax) / Final Judgment

Legal Issues

  1. 1 Whether car leases to employees constituted taxable benefits under ITEPA 2003
  2. 2 Whether such leases are taxable as earnings under s.62 ITEPA
  3. 3 Whether tax is payable where employees paid full market value for leases

Ratio Decidendi

The tribunal held that the car leases created proprietary rights in the cars for employees, amounting to a transfer of property, and that employees paid full market value for the leases. Therefore, the car benefit charge under ITEPA 2003 did not apply. Any benefit was taxable as earnings under s.62 ITEPA, but as full value was paid, no taxable benefit arose. Consequently, the mileage allowance exemption applied, and there was no liability to income tax or NICs on the arrangements.

Court Disposition

Appeal allowed in full

Orders

  • All notices of determination, decision, and assessments to tax set aside
  • No liability to income tax or National Insurance Contributions arises on the arrangements