The Importance of Evidence – Pool Cars

A recent tribunal case (A Ryan-Munden v HMRC) demonstrated the importance of ensuring that suitable evidence is kept to prove the taxpayer’s position.

The taxpayer was a director of a company and was provided with the use of a Mercedes.  It was claimed by the company that it was a pool car and was kept at the premises of the company in a garage.  There was no log of the journeys made in the vehicle.

HMRC argued that the car was for the exclusive use of the taxpayer and was therefore assessable as a benefit in kind.  The director was provided with a different company car as well as owning a car privately.

The tribunal were not satisfied with the evidence presented, which included diaries of the journeys made in the car but not a log which was kept in the car, the company claimed this has disappeared.  They stated that the diaries did not appear to have been maintained on a regular timely basis and were therefore not a ‘contemporary record’ of the journeys made in the car.

As there was no evidence to prove otherwise, the car was assessed on the taxpayer as a benefit,  the tribunal finding it was used solely by the director.

 This case shows that it is important to keep sufficient records for any claim made where tax could be at stake.  It is generally the responsibility of the taxpayer to prove what actually happened.  As this case shows, where such evidence cannot be produced it could be costly.