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Marcia Willett Ltd v HMRC

In Marcia Willett Ltd v HMRC (TC02301 – 17 October) a family company (M) owned a property which its directors occupied. M paid for repairs to the property. HMRC informed M that this amounted to a benefit in kind giving rise to a charge to income tax under ITEPA 2003 s 203. M adjusted the directors’ loan accounts in order to ‘make good’ the benefit in kind under s 203(2). HMRC accepted that this had the effect of removing the charge to income tax under s 203. However HMRC issued a ruling that M was still required to pay Class 1A national insurance contributions under SSCBA 1992 s 10. The First-tier Tribunal allowed M’s appeal. Judge Short held that ‘there can be no charge to Class 1A NICs in circumstances where there is no income tax charge’ and that ‘the “making good” provisions at s 203 result in...

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