Harris & Co accountants Northampton, the specialist motorsport accountants reprt on an importnat recent tax case on whether or not race cars are company cars and therefore subject to a benefit in kind tax.
The company Huntington Antiques Ltd, as the name suggests, trades in antiques from retail premises. The appellant accepted that he was both a shareholder and director of that company in the material years and that he was also an employee with the company operating PAYE in respect of his remuneration. He said that he was not provided with a company car as he had ample motorcars of his own.
5. Mr Golding explained that the Ferrari motorcar was owned by the company and had been paid for by the company in 1998. He said that when it was purchased it was a ‘challenge’ car by which he meant that it was for use on tracks or circuits only and could not lawfully be used on the public highway. He described its purchase as being a marketing device or marketing tool because the company"s better clients or prospective clients would be invited to track event days where they would be wined, dined and allowed to ride (with a suitably qualified driver) in the Ferrari motorcar at the track. Naturally, the company"s marketing brochures would be made available to such attendees.
6. Mr Golding explained that these events took place, as one might expect, in the spring and summer. During the autumn and winter months the track car was taken to the premises of Italia Autosport in West Yorkshire. The car was stored, maintained and transported by that company which also provided a qualified driver when the car was being used for marketing purposes at various circuits or tracks.
HMRC lost the case