Office of Public Sector Information
PART 3 continued CHAPTER 6 continued
(1) A deduction is to be made from the amount carried forward from step 6 of section 121(1) if the car has been unavailable on any day during the tax year in question.
(2) For the purposes of this section a car is unavailable on any day if the day—
(a) falls before the first day on which the car is available to the employee,
(b) falls after the last day on which the car is available to the employee, or
(c) falls within a period of 30 days or more throughout which the car is not available to the employee.
(3) The amount of the deduction is given by the formula—
where—
U is the number of days in the year on which the car is unavailable,
Y is the number of days in that year, and
A is the amount carried forward from step 6.
(4) This section is subject to section 145 (modification where car temporarily replaced).
(1) A deduction is to be made from the provisional sum calculated under step 7 of section 121(1) if, as a condition of the car being available for the employee’s private use, the employee—
(a) is required in the tax year in question to pay (whether by way of deduction from earnings or otherwise) an amount of money for that use, and
(b) makes such payment.
(2) If the amount paid by the employee in respect of that year is equal to or exceeds the provisional sum, the provisional sum is reduced so that the cash equivalent of the benefit of the car for that year is nil.
(3) In any other case the amount paid by the employee in respect of the year is deducted from the provisional sum in order to give the cash equivalent of the benefit of the car for that year.
(4) In this section the reference to the car being available for the employee’s private use includes a reference to the car being available for the private use of a member of the employee’s family or household.
(5) This section is subject to section 145 (modification where car temporarily replaced).
(1) This section applies if—
(a) the car normally available to an employee (“the normal car”) is not available to the employee for a period of less than 30 days,
(b) another car (“the replacement car”) is made available to the employee in order to replace the normal car for the whole or part of that period,
(c) the employee is chargeable to tax in respect of both the normal car and the replacement car by virtue of section 120, and
(d) the replacement car meets condition A or B.
(2) Condition A is met if the replacement car is not materially better than the normal car.
(3) Condition B is met if the replacement car is not made available to the employee under an arrangement of which the main purpose, or one of the main purposes, is to provide the employee with the benefit of a car which is materially better than the normal car.
(4) If this section applies—
(a) section 143 (deduction for periods when car unavailable) applies so that the replacement car is to be treated as unavailable on the days of the period during which it replaces the normal car, and
(b) section 144 (deduction for payments for private use) applies as if the replacement had not been made and the replacement car were a continuation of the normal car.
(5) A replacement car is regarded as materially better than the normal car if—
(a) it is materially better in quality, or
(b) when calculating the cash equivalent of the benefit of the replacement car, the interim sum calculated under step 4 of section 121(1) is materially higher than the interim sum calculated in relation to the normal car.
(1) This section applies if the car—
(a) has been manufactured so as to be capable of running on road fuel gas, and
(b) is not a car to which section 137 (different CO2 emissions figure for bi-fuel cars) applies.
(2) The price of the car found under step 1 of section 121(1) is to be reduced by so much of that price as it is reasonable to attribute to the car being manufactured in such a way as to be capable of running on road fuel gas rather than in such a way as to be capable of running only on petrol.
(1) This section applies in calculating the cash equivalent of the benefit of a car for a tax year if—
(a) the age of the car at the end of the year is 15 years or more,
(b) the market value of the car for the year is £15,000 or more, and
(c) that market value exceeds the amount carried forward from step 3 of section 121(1).
(2) For the amount carried forward from step 3 substitute the market value of the car for the tax year in question less any deductions under subsection (6).
(3) The market value of a car for a tax year is the price which the car might reasonably have been expected to fetch on a sale in the open market on—
(a) the last day of that year, or
(b) the last day in that year on which the car is available to the employee if that is earlier.
(4) It is assumed that any qualifying accessories available with the car on that day are included in the sale.
(5) Subsection (6) applies if the employee contributes a capital sum to expenditure on the provision of—
(a) the car, or
(b) any qualifying accessory which is taken into account in determining the market value of the car.
(6) A deduction is to be made from the market value of the car—
(a) for the tax year in which the contribution is made, and
(b) for all subsequent years in which the employee is chargeable to tax in respect of the car by virtue of section 120.
(7) The amount of the deduction allowed in any tax year is the lesser of—
(a) the total of the capital sums contributed by the employee in that year and any earlier years to expenditure on the provision of—
(i) the car, or
(ii) any qualifying accessory which is taken into account in determining the market value of the car for the tax year in question, and
(b) £5,000.
(1) This section applies if in a tax year a car—
(a) is available to more than one employee concurrently,
(b) is so made available by the same employer, and
(c) is available concurrently for each employee’s private use,
and two or more of those employees are chargeable to tax in respect of the car in that year by virtue of section 120.
(2) The cash equivalent of the benefit of the car to each of those employees for that year—
(a) is to be calculated separately under section 121, and
(b) is then to be reduced on a just and reasonable basis.
(3) If the employment of any of the employees mentioned in subsection (1)(a) is an excluded employment, the availability of the car to that employee is to be disregarded for the purposes of subsection (2)(b).
(4) In this section the reference to the car being available for each employee’s private use includes a reference to the car being available for the private use of a member of the employee’s family or household.
(1) If in a tax year—
(a) fuel is provided for a car by reason of an employee’s employment, and
(b) that person is chargeable to tax in respect of the car by virtue of section 120,
the cash equivalent of the benefit of the fuel is to be treated as earnings from the employment for that year.
(2) The cash equivalent of the benefit of the fuel is calculated in accordance with sections 150 to 153.
(3) Fuel is to be treated as provided for a car, in addition to any other way in which it may be provided, if—
(a) any liability in respect of the provision of fuel for the car is discharged,
(b) a non-cash voucher or a credit-token is used to obtain fuel for the car,
(c) a non-cash voucher or a credit-token is used to obtain money which is spent on fuel for the car, or
(d) any sum is paid in respect of expenses incurred in providing fuel for the car.
(4) References in this section to fuel do not include any facility or means for supplying electrical energy for an electrically propelled vehicle.
(1) The cash equivalent of the benefit of the fuel is the appropriate percentage of £14,400.
(2) The “appropriate percentage” means the appropriate percentage determined in accordance with sections 133 to 142 for the purpose of calculating the cash equivalent of the benefit of the car for which the fuel is provided.
(3) But the cash equivalent may be—
(a) nil where either of the conditions in section 151 is met;
(b) proportionately reduced under section 152;
(c) reduced under section 153.
(1) The cash equivalent of the benefit of the fuel is nil if condition A or B is met.
(2) Condition A is met if in the tax year in question—
(a) the employee is required to make good to the person providing the fuel the whole of the expense incurred by that person in connection with the provision of the fuel for the employee’s private use, and
(b) the employee does make good that expense.
(3) Condition B is met if in the tax year in question the fuel is made available only for business travel (see section 171(1)).
(1) The cash equivalent of the benefit of the fuel is to be proportionately reduced if for any part of the tax year in question the car for which the fuel is provided is unavailable (within the meaning of section 143 (deduction for periods when car unavailable)).
(2) The cash equivalent of the benefit of the fuel is also to be proportionately reduced if for any part of the tax year in question—
(a) the facility for the provision of fuel as mentioned in section 149(1) is not available,
(b) the fuel is made available only for business travel (see section 171(1)), or
(c) the employee is required to make good to the person providing the fuel the whole of the expense incurred by that person in connection with the provision of the fuel for the employee’s private use and the employee does make good that expense.
(3) The fact that any of the conditions specified in subsection (2) is met for part of a tax year is to be disregarded if there is a time later in that year when none of those conditions is met.
(4) Where the cash equivalent is to be proportionately reduced under subsection (1) or (2) (or under both those subsections), the reduced amount is given by the formula—
where—
CE is the amount of the cash equivalent before any reduction,
Y is the number of days in the tax year in question, and
D is the total number of days in that year on which either the car is unavailable or one or more of the conditions in subsection (2) is met.
If a reduction of the cash equivalent of the benefit of the car for which the fuel is provided is made under section 148 (reduction of cash equivalent where car is shared), a corresponding reduction is to be made in relation to the cash equivalent of the benefit of the fuel.
If this Chapter applies to a van in relation to a particular tax year, the cash equivalent of the benefit of the van is to be treated as earnings from the employment for that year.
(1) The method of calculation of the cash equivalent of the benefit of a van for a tax year depends upon whether the van is a shared van for the whole or any part of that year.
(2) If the van is not a shared van for the whole or any part of the year, the cash equivalent of the benefit of the van for the year is the value of exclusive availability calculated in accordance with section 157.
(3) If the van is a shared van for the whole of the year, the cash equivalent of the benefit of the van for the year is the value of shared availability calculated in accordance with section 160.
This is subject to subsection (7) where more than one shared van is available to an employee.
(4) If the van is a shared van for only part of the year the cash equivalent of the benefit of the van for the year is the total of—
(a) the value of exclusive availability calculated in accordance with section 157 (for the period when it is not a shared van), and
(b) the value of shared availability calculated in accordance with section 160 (for the period when it is a shared van).
This is subject to subsection (7) where more than one shared van is available to an employee.
(5) The value of shared availability calculated in accordance with section 160 under section 161 (normal calculation) takes account of—
(a) the shared van, and
(b) where that van is made available by the employer, any other vans made available by the employer (whether or not to the employee or a member of the employee’s family or household) which are shared vans for the whole or any part of the tax year in question.
(6) The value of shared availability calculated in accordance with section 160 under section 164 (alternative calculation) takes account of—
(a) the shared van, and
(b) where that van is made available by the employer, any other vans made available by the employer to the employee or a member of the employee’s family or household which are shared vans for the whole or any part of the tax year in question.
(7) Accordingly, if more than one shared van, which is made available by the same employer, is available to an employee in a tax year the total of the cash equivalents in respect of those vans is calculated by—
(a) taking the value of shared availability calculated once in accordance with section 160, and
(b) if any of those vans is a shared van for only part of the year, adding the value of exclusive availability in respect of each of those vans calculated in accordance with section 157.
(8) This section is subject to section 166 (limit of cash equivalent).
(1) For the purposes of sections 155 to 165 a van is a shared van for a period if condition A or B is met.
(2) Condition A is met if throughout the period the van is available concurrently to more than one employee of the same employer.
(3) Condition B is met if—
(a) the period is one throughout which the van is available to different employees of the same employer (a “shared period”), and
(b) the circumstances are such that the employee or employees to whom the van is available at any given time in the period are not necessarily the same as those to whom it is available at any other given time in the period.
(4) But if the van is available to only one employee for a period exceeding 30 days (an “exclusive period”)—
(a) the exclusive period does not count towards any period that would otherwise be a shared period,
(b) the shared period is to be treated as ending when the exclusive period begins, and
(c) a further shared period may begin after the end of the exclusive period.
(5) If a van is a shared van for part of a day, it is to be treated for the purposes of this section as shared throughout that day.
The value of exclusive availability is calculated as follows—
Step 1
Determine the age of the van.
Step 2
If the age of the van is less than 4 years at the end of the tax year in question, the basic value of the van for the year is £500.
In any other case, the basic value of the van for the year is £350.
Step 3
Make any deduction from the basic value of the van under section 158 for any periods when the van was unavailable or a shared van.
The resulting amount is the provisional sum.
Step 4
Make any deduction from the provisional sum under section 159 in respect of payments by the employee for the private use of the van.
The result is the value of exclusive availability.
(1) A deduction is to be made from the basic value of the van calculated under step 2 of section 157 if there are any excluded days during the tax year in question.
(2) In this section an “excluded day” means a day on which—
(a) the van is unavailable (see subsection (4)), or
(b) the van is a shared van.
(3) The amount of the deduction is given by the formula—
where—
E is the number of excluded days in the year,
Y is the number of days in the year, and
B is the basic value of the van calculated under step 2 of section 157.
(4) For the purposes of this section a van is unavailable on any day if the day—
(a) falls before the first day on which the van is available to the employee,
(b) falls after the last day on which the van is available to the employee, or
(c) falls within a period of 30 days or more throughout which the van is not available to the employee.
(1) A deduction is to be made from the provisional sum calculated under step 3 of section 157 if, as a condition of the van being available for the employee’s private use, the employee—
(a) is required in the tax year in question to pay (whether by way of deduction from earnings or otherwise) an amount of money for that use, and
(b) makes such payment.
(2) If the amount paid by the employee in respect of that year is equal to or exceeds the provisional sum, the provisional sum is reduced so that the value of exclusive availability is nil.
(3) In any other case the amount paid by the employee in respect of the year is deducted from the provisional sum in order to give the value of exclusive availability.
(4) If the van is a shared van for any part of the tax year in question, the reference in subsection (1) to the employee’s private use in that year is to be read as a reference to the employee’s private use in that part of the year when the van is not a shared van.
(5) In this section any reference to the van being available for the employee’s private use includes a reference to the van being available for the private use of a member of the employee’s family or household.
The value of shared availability is calculated under—
(a) section 161, or
(b) section 164 where the employee makes a claim for that section to apply.
(1) The value of shared availability is calculated as follows—
Step 1
Identify the van or vans involved in the calculation. They are—
the shared van, and
where that van is made available by the employer, any other vans made available (whether or not to the employee or a member of the employee’s family or household) by the same employer which are shared vans for the whole or any part of the tax year in question.
Step 2
Determine whether the employee is a participating employee within the meaning of section 162.
If the employee is not, then the value of shared availability is nil.
Step 3
Determine the total number of participating employees within the meaning of section 162.
Step 4
Find the basic value of the van for the year under section 163 or, where more than one van is involved, the basic value of each of those vans for the year under that section.
Step 5
Calculate the reckonable amount which is given by the formula—
where—
BV is the basic value of the van or, where more than one van is involved, the total of the basic values of each of those vans, and
PE is the total number of participating employees.
Step 6
If the reckonable amount exceeds £500, the provisional sum is £500.
In any other case, the provisional sum is the reckonable amount.
Step 7
Make any deduction from the provisional sum under section 165 in respect of payments by the employee for the private use of the van or vans involved.
The result is the value of shared availability.
(2) The calculation is made under this section in relation to a participating employee regardless of—
(a) the number of vans involved which are available to the particular employee,
(b) the fact that a particular van involved is or is not available to, or used by, the employee, or
(c) the extent to which a particular van involved is available to, or used by, the employee.
(1) If only one van is involved, an employee is a participating employee for the purposes of section 161 if—
(a) the van is available to the employee for the employee’s private use while it is a shared van, and
(b) the employee makes private use of it at least once while it is a shared van.
(2) If more than one van is involved, an employee is a participating employee for the purposes of section 161 if—
(a) one of the vans is available to the employee for the employee’s private use while it is a shared van, or
(b) some or all of the vans are available to the employee for the employee’s private use while they are shared vans,
and the employee makes private use of at least one of the vans involved while it is a shared van.
(3) In this section—
(a) any reference to a van being available for an employee’s private use includes a reference to the van being available for the private use of a member of the employee’s family or household, and
(b) any reference to an employee making private use of a van includes a reference to a member of the employee’s family or household making private use of it.
(1) The basic value of a shared van is calculated as follows—
Step 1
Determine the age of the van.
Step 2
If the age of the van is less than 4 years at the end of the tax year in question, the interim value of the van is £500.
In any other case, the interim value of the van is £350.
Step 3
Make a deduction from the interim value if there are any excluded days during the tax year in question.
The amount of the deduction is given by the formula—
where—
E is the number of excluded days in the year,
Y is the number of days in the year, and
IV is the interim value of the van.
The result is the basic value of the van for the year.
(2) In this section an “excluded day” means a day on which—
(a) the van is not a shared van, or
(b) the van is incapable of use.
(3) For the purposes of this section a van is to be treated as incapable of use on any day if the day falls within a period of 30 days or more throughout which the van is incapable of being used at all.
(1) This section applies if the employee makes a claim for this section to apply instead of section 161.
(2) The value of shared availability is calculated as follows—
Step 1
Identify the van or vans involved in the calculation. They are—
the shared van, and
where that van is made available by the employer, any other vans made available by the same employer to the employee or a member of the employee’s family or household which are shared vans for the whole or any part of the tax year in question.
Step 2
Determine the number of relevant days for the van, or where more than one van is involved, for each of those vans.
Step 3
Calculate the provisional sum which is given by the formula—
RD × £5
where RD is the number of relevant days for the van or, where more than one van is involved, the total of the number of relevant days for each of those vans.
Step 4
Make any deduction from the provisional sum under section 165 in respect of payments by the employee for the private use of the van or vans involved.
The result is the value of shared availability.
(3) For the purposes of this section a relevant day is a day—
(a) which falls in the tax year in question, and
(b) during which (or during part of which) the employee or a member of the employee’s family or household makes private use of the van concerned while it is a shared van.
(4) For the purposes of section 95 of TMA 1970 (incorrect return etc.) a claim under this section is to be treated as a claim for relief.
(1) A deduction is to be made from the provisional sum calculated under step 6 of section 161(1) or step 3 of section 164(2) if, as a condition of the van or vans involved being available for the employee’s private use, the employee—
(a) is required in the tax year in question to pay (whether by way of deduction from earnings or otherwise) an amount of money for that use, and
(b) makes such payment.
(2) If the relevant sum in respect of that year is equal to or exceeds the provisional sum, the provisional sum is reduced so that the value of shared availability is nil.
(3) In any other case the relevant sum in respect of the year is deducted from the provisional sum in order to give the value of shared availability.
(4) The relevant sum is found by—
(a) taking for any van involved the amount paid by the employee as a condition of it being available for the employee’s private use in respect of the period when it is a shared van in the year concerned, and
(b) where more than one van is involved, adding together all the amounts found under paragraph (a).
(5) In this section any reference to a van being available for the employee’s private use includes a reference to the van being available for the private use of a member of the employee’s family or household.
If—
(a) the cash equivalent of the benefit of vans to an employee for a tax year would (apart from this section) total more than £500, and
(b) no more than one of the vans is available to the employee for the employee’s private use, or the private use of a member of the employee’s family or household, at any one time in the year,
the cash equivalent of the benefit of the vans to the employee for the year is to be £500.
Income Tax (Earnings and Pensions) Act 2003