Tribunal case – Pool cars
The Tribunal heard an appeal from a taxpayer against a decision of HMRC that Class 1A national insurance contributions were payable in respect of ‘pool car’ and the associated provision of fuel.
The taxpayer company bought a Jaguar XJ Sport to be used as a ‘pool’ car. If the car qualified for such treatment its use would not be subject to Class 1A national insurance contributions.
It transpires that the company ran a restaurant and was managed by a sole director who decided that the company should acquire a car. Both the tribunal and HMRC accept that there was some business use of the car both for making deliveries and to transport provisions. The car was also used to transport staff.
However, in order to be defined as a pool car a number of conditions must be met. The taxpayer was unable to satisfy any of the conditions necessary for the car to qualify as a pool car. In particular that a pool car should not normally be kept overnight on or in the vicinity of residential premises of the employees. In fact the Jaguar was habitually kept overnight at the director’s home and although business records were kept at the home, the Tribunal was not convinced that the director’s home was ‘occupied’ by the taxpayer.
There was also no evidence that the car had been used by any other employee and the car was only insured for private use. The Tribunal had some sympathy for the taxpayer in respect of the fuel scale charges being disproportionate but said that the rates were as provided for in the relevant legislation.
The taxpayer’s appeal was dismissed.