UKFTT 255 (2009) Whitby and Ball v HMRC

Car and fuel benefits, leased cars - HMRC won 

Case Summary: 

Leased cars were found to be made available to employees so car and fuel benefits arose. 

Business mileage had been paid to employees at the rates of 40p for first 10,000 miles and 25p thereafter. But the approved mileage allowance payments (AMAP) exemption only applied where it was not a company car. The Tribunal said this applied even if after the calculations to arrive at the car benefit the benefit was NIL. As a result the mileage allowances were reduced by the cost of fuel incurred by employees - about 10p per mile. 

“The mileage allowance payments do not constitute AMAPs within section 229, because the cars were “company vehicles” within section 236(2) and thus excluded by section 229(4), and so the relief afforded to AMAPs by section 229(1) is not available.  The cash payments of mileage allowances constituted emoluments and thus earnings of the employees (section 62). The Tribunal notes that HMRC have agreed that the taxable amount of the mileage allowances can be reduced by the “advisory fuel rates”.  The taxable amount of the mileage allowances cannot be further reduced by reference to the lease rentals paid by the employees.”