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, amounting to a transfer of property, so the car benefit charge under ITEPA 2003 s.114 could not apply. Any benefit was taxable as earnings under s.62 ITEPA, but as employees paid full market value, there was no taxable benefit or earnings. Consequently, the mileage allowance exemption applied, and there was no liability to income tax or NICs on the payments in question.

Citation
[2013] UKFTT 350 (TC)
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
Legal Topics
Income Tax, Corporation Tax, Employment Income, Benefits in Kind, Company Cars, Mileage Allowances, National Insurance Contributions (nics)
Tax Law Employment Law Social Security Law Income Tax Corporation Tax Employment Income Benefits in Kind Company Cars +2 more

Case Brief

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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 Part 3 Chapter 6 (car benefit charge)
  2. 2 Whether such leases were taxable as earnings under s.62 ITEPA
  3. 3 Whether tax/NICs were payable where employees paid full market value for car leases

Ratio Decidendi

The tribunal held that the car leases created proprietary rights in the cars, amounting to a transfer of property, so the car benefit charge under ITEPA 2003 s.114 could not apply. Any benefit was taxable as earnings under s.62 ITEPA, but as employees paid full market value, there was no taxable benefit or earnings. Consequently, the mileage allowance exemption applied, and there was no liability to income tax or NICs on the payments in question.

Court Disposition

Appeal allowed

Orders

  • All notices of determination, decision, and assessments to tax and NICs set aside
  • No liability to income tax or NICs arises on the car leases or mileage allowance payments