A supermarket manager receives tax assessments with interest and penalty over two years for private use of the BMW X5 provided to him. According to the tax authorities, it has not been proved that the manager did not drive more than 500 kilometres privately per year. How does the court rule?
What preceded?
The supermarket manager has a declaration of no private use for the car. After two years, he receives a letter from the Tax Office asking him to prove that he did not drive more than 500 private kilometres per year with the car. To this end, the Tax Office asks him to fill in a questionnaire and, if a trip registration has been kept, to submit it.
The supermarket manager sends in the completed form, a driving record and a statement. In it, he says he has had several cars for several years, generally vintage cars, but also functional cars for daily use. That the BMW X5 was made available for commuting and delivery work, that there was no intention to use this car for private mileage and that this did not happen. Private use is also expressly not allowed.
The Inland Revenue raises questions following inconsistencies between the trip records and the National Car Pass and fuel receipts. This leads to the imposition of the assessments.
Judge's considerations
The supermarket manager argues that the car was used privately for no more than 500 kilometres per year. He kept a trip log that would show this. However, that trip log was stored on a business computer, he did not forward it to his private email address and he could not retrieve it due to the sale of the employer's business either. Therefore, he reconstructed a trip registration using trip records for previous years.
The judge put first that a trip record must be kept regularly to ensure a proper record of reality. Admittedly, the supermarket manager claims that he did so, but because he was unable to produce those trip records, the court cannot determine whether he thereby actually shows that he used the car for private purposes for no more than 500 kilometres.
A reconstructed trip registration runs the risk of not accurately reflecting reality. Consequently, a retrospectively drawn up kilometre records will have less evidential value and the heavier burden of proof of 'proving' will not be met easily.
In view of the deficiencies and gaps in the mileage records and other documents pointed out by the Inland Revenue, the court finds that the interested party has not shown that the car was not used for private purposes for more than 500 kilometres on an annual basis.
The supermarket manager further points to the ban on private use of the car agreed with the employer. According to the court, the agreed ban does not preclude the manager from acting in violation of that ban. This is all the more true because nowhere does it follow that the employer monitored compliance with that prohibition. The manager further argued that he had several cars that he used for private journeys in the years under review. Even with this mere statement, in the court's opinion, he did not provide sufficient evidence that he drove less than 500 kilometres privately with the car made available to him by the employer.
Judge's ruling
The court concluded the supermarket manager failed to meet his burden of proof. This means that the Inland Revenue was right to impose the assessments.
Note: Proving that you drove less than 500 kilometres privately with a company car is no mean feat. There is an increased burden of proof: it is not about making it plausible, but about proving it.
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