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Owner-managed businesses should be alerted to the consequences of leasing a car through a company, as the advantage of a lower lease premium may be outweighed by the tax and NICs liabilities that result.
In a recent case, the First-tier Tribunal (Tax Chamber) held that a car leased in the name of a company, but for which all lease payments, maintenance and insurance were borne by the director who used it, was a benefit provided by reason of employment. Fortunately for the taxpayer, the tribunal did not consider that he had acted carelessly or negligently by omitting the car benefit from his tax return as he, and his advisers, honestly believed that there was no benefit.
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