MWL International Ltd & Anor v The Commissioners for HMRC
[2024] UKFTT 402 (TC)
Timothy Norton & Anor v The Commissioners for HMRC
28 February 2023
[2023] UKUT 48 (TCC)
Upper Tribunal
A company owner used two rare company cars, sometimes without tax. The tax man said he got a benefit even when the cars were off the road. The court agreed about the benefit but disagreed about a separate tax bill and a letter that was meant to close the case; those were ruled invalid.
Key Facts
- •Mr. Norton and Tim Norton Motor Services Ltd appealed a First-tier Tribunal (FTT) decision regarding income tax and NIC assessments for benefits in kind related to two company cars (Maserati and Ford GT40).
- •The FTT found the cars were 'made available' to Mr. Norton even when not used or legally drivable due to lack of VED (Vehicle Excise Duty).
- •The appeal challenged the FTT's interpretation of 'made available' in relation to SORN (Statutory Off Road Notification) status, Mrs. Norton's consent, and the company handbook's restrictions.
- •Further grounds of appeal concerned the validity of a discovery assessment for 2016/17 and the effectiveness of a letter as a closure notice under the Taxes Management Act 1970 (TMA).
Legal Principles
Interpretation of 'made available' under ITEPA Chapter 6 regarding car benefits.
Income Tax (Earnings and Pensions) Act 2003 (ITEPA), sections 114-118, 143.
Effectiveness of contractual restrictions on private use of company cars; a restriction must be effective at the relevant time.
Customs and Excise Commissioners v Elm Milk Ltd [2006] EWCA Civ 164.
Validity of discovery assessments under TMA section 29; assessments are prohibited during the enquiry period unless specific conditions are met.
Taxes Management Act 1970 (TMA), sections 29(3), 29(5).
Requirements for a valid closure notice under TMA section 28A; it must state that the enquiry is complete, state conclusions, and detail any required amendments to the return.
Taxes Management Act 1970 (TMA), section 28A.
Effect of TMA section 114 on procedural defects; defects can be disregarded if the document is substantially compliant with the Taxes Acts.
Taxes Management Act 1970 (TMA), section 114.
Outcomes
Company's appeal dismissed.
FTT's finding that the cars were 'made available' was a permissible finding of fact, considering the ease of removing the SORN and Mrs. Norton's implied consent.
Mr. Norton's appeal regarding the discovery assessment for 2016/17 allowed.
Discovery assessment made during the enquiry period is invalid under TMA section 29(3) and 29(5) because the conditions for a valid assessment during that period were not met.
Mr. Norton's appeal regarding the closure notice dismissed.
The March 2017 letter did not meet the substantive requirements of a closure notice under TMA section 28A, and the defects were not curable under TMA section 114.