EIM23155 | Car benefit: other specific types of vehicle

Section 115(1) ITEPA 2003

Motor homes

HMRC has always considered these vehicles to be cars for tax purposes because

• they are mechanically propelled road vehicles, and

• none of the exceptions in s115(1) (EIM23100) apply to prevent them being cars.

In March 2006, the High Court confirmed an earlier decision by the Special Commissioners and upheld this view in the cases of County Pharmacy v R & C Commrs; Morris v R & C Commrs (2005) Sp C 495. This ruled that a motorhome provided by County Pharmacy to Mr Morris was not primarily suited for the conveyance of goods or burden. The facts showed that the vehicle was primarily suited for leisure purposes and was ill-equipped for the conveyance of goods. Whilst Mr Morris submitted that the vehicle had been used to transport business stock, this was irrelevant as the legislative test was to determine whether the construction of the vehicle was primarily suited to carry goods or burden; not the actual use that the vehicle was put to by Mr Morris. As the courts ruled that the vehicle represented a car, Mr Morris was liable to tax on the cash equivalent of the car and fuel provided, with County Pharmacy liable to Class 1A National Insurance contributions in respect of the benefit of the car and fuel.

For off-road vehicles, see EIM23145.