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 TAX CASE: FERRARI WAS NOT A BENEFIT

The taxpayer, Michael Golding, was a director of Huntington Antiques Ltd. During an enquiry into the tax affairs of that company, HMRC became aware that that company owned two cars.

They concluded that as the taxpayer was a director-employee of the company, the cars were made available to him by reason of his employment. They raised assessments, which included car benefit in respect of two cars, a BMW and a Ferrari.

The taxpayer appealed. He explained that the Ferrari had been bought by the company for use on tracks or circuits only and could not lawfully be used on the public highway. Its sole use was as a marketing tool to entertain clients.

However, it was decided to sell the car in 2001, although no actual sale took place until 2005. HMRC argued that the Ferrari was available to the taxpayer by reason of his employment.

After surveying the evidence, the First-tier Tribunal decided that the taxpayer had made no personal use of the Ferrari and that it was only used as a marketing tool. It would be artificial to regard the car, in those circumstances, as being "made available" to the taxpayer. The taxpayers appeal was allowed.

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