(1) In this Chapter a car’s “list price” means the price published by the car’s manufacturer, importer or distributor (as the case may be) as the inclusive price appropriate for a car of that kind if sold—
(a) in the United Kingdom,
(b) singly,
(c) in a retail sale,
(d) in the open market, and
(e) on the day immediately before the date of the car’s first registration.
(2) The “inclusive price” means the price inclusive of—
(a) any charge for delivery by the manufacturer, importer or distributor to the seller’s place of business, and
(b) any relevant taxes (see section 171(1)).
124 The notional price of a car with no list price
(1) In this Chapter a car’s “notional price” means the price which might reasonably have been expected to be its list price if its manufacturer, importer or distributor (as the case may be) had published a price as the inclusive price appropriate for a sale of a car of the same kind sold—
(a) in the United Kingdom,
(b) singly,
(c) in a retail sale,
(d) in the open market,
(e) on the day immediately before the date of the car’s first registration, and
(f) with accessories equivalent to the qualifying accessories (see section 125) available with the car at the time when it was first made available to the employee.
(2) In this section “inclusive price” has the same meaning as in section 123.
(1) This section applies where—
(a) a car has automatic transmission (“the automatic car”),
(b) at any time in the year when the automatic car is available to the employee (“E”), E holds a disabled person's badge, and
(c) by reason of E's disability, E must, in the event of wanting to drive a car, drive a car which has automatic transmission.
(2) If, under section 122 to 124, the price of the automatic car is more than it would have been if the automatic car had been an equivalent manual car, the price of the automatic car is to be the price of an equivalent manual car.
(3) In subsection (2) “an equivalent manual car” means a car which—
(a) is first registered at or about the same time as the automatic car, and
(b) does not have automatic transmission, but otherwise is the closest variant available of the make and model of the automatic car.
(4) For the purposes of this section a car has automatic transmission if—
(a) the driver of the car is not provided with any means by which the driver may vary the gear ratio between the engine and the road wheels independently of the accelerator and the brakes, or
(b) the driver is provided with such means, but they do not include—
(i) a clutch pedal, or
(ii) a lever which the driver may operate manually.
(5) For the purposes of this section a car is available to an employee at a particular time if it is then made available, by reason of the employment and without any transfer of the property in it, to the employee.
(1) In this Chapter “qualifying accessory” means an accessory which—
(a) is made available for use with the car without any transfer of the property in the accessory,
(b) is made available by reason of the employment, and
(c) is attached to the car (whether permanently or not).
(2) For the purposes of this Chapter “accessory” includes any kind of equipment but does not include—
(a) equipment necessarily provided for use in the performance of the duties of the employment;
(b) equipment by means of which a car is capable of running on road fuel gas;
(c) equipment to enable a disabled person to use a car (see section 172);
(d) a mobile telephone (within the meaning given in section 319(2)).
(3) But subsection (2)(b) does not apply in relation to a car to which section 137 (different CO2 emissions figure for bi-fuel cars) applies.
(3A) Subsection (2) needs to be read with section 125A (security features not to be regarded as accessories).
(4) In this Chapter—
“standard accessory” means an accessory equivalent to an accessory assumed to be available with cars of the same kind as the car in question in arriving at the list price, and
“non-standard accessory” means any other accessory.
125A Security features not to be regarded as accessories
(1) This section applies where a car made available to an employee has a relevant security feature.
(2) The relevant security feature is not an accessory for the purposes of this Chapter if it is provided in order to meet a threat to the employee's personal physical security which arises wholly or mainly because of the nature of the employee's employment.
(3) In this section “relevant security feature” means—
(a) armour designed to protect the car's occupants from explosions or gunfire,
(b) bullet-resistant glass,
(c) any modification to the car's fuel tank designed to protect the tank's contents from explosions or gunfire (including by making the tank self-sealing), and
(d) any modification made to the car in consequence of anything which is a relevant security feature by virtue of paragraph (a), (b) or (c).
(4) The Treasury may by regulations amend the definition of “relevant security feature” in subsection (3).
126 Amounts taken into account in respect of accessories
(1) The price of the following accessories is to be taken into account under step 2 of section 121(1) and step 2 of section 121B(1) —
(a) in the case of a car with a list price, the price of any initial extra accessory, and
(b) in the case of any car, the price of any later accessory.
(2) In this Chapter an “initial extra accessory” means a qualifying accessory which—
(a) is a non-standard accessory,
(b) is available with the car at the time when it is first made available to the employee, and
(c) if it is an accessory in relation to which there is no published price of the manufacturer, importer or distributor of the car (see section 128), is available with the car in the tax year in question.
(3) In this Chapter a “later accessory” means a qualifying accessory which—
(a) is available with the car in the tax year in question,
(b) was not available with the car at the time when it was first made available to the employee,
(c) was not made available with the car before 1st August 1993, and
(d) has a price of at least £100.
(4) In this section references to the price of an accessory are to—
(a) its list price, if it has one, or
(b) its notional price, if it has no list price.
(5) This section is subject to section 131 (replacement accessories).
(1) For the purposes of this Chapter the list price of an initial extra accessory is—
(a) the published price of the manufacturer, importer or distributor of the car (see section 128), or
(b) if there is no such price, the published price of the manufacturer, importer or distributor of the accessory (see section 129).
(2) For the purposes of this Chapter the list price of a later accessory is the published price of the manufacturer, importer or distributor of the accessory (see section 129).
128 Accessory: published price of the car manufacturer etc.
(1) In this Chapter the “published price of the manufacturer, importer or distributor of the car” in relation to an accessory means the price published by the car’s manufacturer, importer or distributor (as the case may be) as the inclusive price appropriate for an equivalent accessory if sold with a car of the same kind—
(a) in the United Kingdom,
(b) singly,
(c) in a retail sale,
(d) in the open market, and
(e) on the day immediately before the date of the car’s first registration.
(2) The “inclusive price” means the price inclusive of—
(a) any charge for delivery by the manufacturer, importer or distributor to the seller’s place of business,
(b) any relevant taxes other than car tax (see section 171(1)), and
(c) any charge for fitting the accessory.
129 Accessory: published price of the accessory manufacturer etc.
(1) In this Chapter the “published price of the manufacturer, importer or distributor of the accessory” in relation to an accessory means the price published by or on behalf of the manufacturer, importer or distributor of the accessory (as the case may be) as the inclusive price appropriate for such an accessory if sold—
(a) in the United Kingdom,
(b) singly,
(c) in a retail sale,
(d) in the open market, and
(e) at the time immediately before the accessory concerned is first made available for use with the car.
(2) The “inclusive price” means the price inclusive of—
(a) any charge for delivery by the manufacturer, importer or distributor to the seller’s place of business,
(b) any relevant taxes other than car tax (see section 171(1)), and
(c) in the case of an accessory permanently attached to the car, the price which the seller would charge for attaching it.
(3) In the case of an initial extra accessory, the time referred to in subsection (1)(e) may be a time before the car is first made available to the employee.
(1) In this Chapter the “notional price” of an accessory means the inclusive price which it might reasonably have been expected to fetch if sold—
(a) in the United Kingdom,
(b) singly,
(c) in a retail sale,
(d) in the open market, and
(e) at the time immediately before the accessory concerned is first made available for use with the car.
(2) The “inclusive price” means the price inclusive of—
(a) any charge for delivery by the manufacturer, importer or distributor to the seller’s place of business,
(b) any relevant taxes other than car tax (see section 171(1)), and
(c) in the case of an accessory permanently attached to the car, the price which the seller would charge for attaching it.
(3) In the case of an initial extra accessory, the time referred to in subsection (1)(e) may be a time before the car is first made available to the employee.
(1) This section applies for the purposes of sections 121(1) and 121B(1) where—
(a) a later accessory is available with the car in the tax year in question,
(b) that accessory (“the new accessory”) replaced another qualifying accessory (“the old accessory”) in that year or an earlier tax year, and
(c) the new accessory is of the same kind as the old accessory.
(1A) In the application of this section for the purposes of section 121B(1)—
(a) references to the cash equivalent of the benefit of the car for the tax year are to be read as references to the modified cash equivalent of the benefit of the car for the tax year, and
(b) references to step 2 of section 121(1) are to be read as references to step 2 of section 121B(1).
(2) If the new accessory is not superior to the old accessory, the cash equivalent of the benefit of the car for the tax year is to be calculated under step 2 of section 121(1) as if—
(a) the replacement has not been made, and
(b) the new accessory is a continuation of the old accessory.
(3) If the new accessory is superior to the old accessory and the conditions in subsection (4) are met, the cash equivalent of the benefit of the car for the tax year is to be calculated under step 2 of section 121(1)—
(a) as if the old accessory was not available with the car in that tax year, or
(b) where the price of the old accessory would (apart from this section) be added to the price of the car under step 2 of section 121(1) as an initial extra accessory, as if it was not available with the car at the time when the car was first made available to the employee.
(4) The conditions mentioned in subsection (3) are that—
(a) the old accessory was a non-standard accessory, and
(b) both the old and the new accessory would (apart from this section) be taken into account under step 2 of section 121(1) in calculating the cash equivalent of the benefit of the car for the year.
(5) For the purposes of this section a new accessory is superior to an old accessory if the price of the new accessory exceeds whichever is the greater of—
(a) the price of the old accessory, and
(b) the price of an accessory equivalent to the old accessory at the time immediately before the new accessory is first made available for use with the car.
(6) In this section references to the price of an accessory are to—
(a) its list price, if it has one, or
(b) its notional price, if it has no list price.
(1) This section applies for the purposes of section 121(1) 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 calculating the cash equivalent of the benefit of the car.
(2) A deduction is to be made from the amount carried forward from step 2 of section 121(1)—
(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.
(3) 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 calculating the cash equivalent of the benefit of the car for the tax year in question, and
(b) £5,000.
132A Capital contributions by employee: optional remuneration arrangements
(1) This section applies for the purposes of section 121A(1) 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 calculating under section 121B the modified cash equivalent of the benefit of the car.
(2) A deduction is to be made from the amount carried forward from step 1 of section 121A(1)—
(a) for the tax year in which the contribution is made, and
(b) for all subsequent tax years in which the employee is chargeable to tax in respect of the car by virtue of section 120A.
(3) The amount of the deduction allowed in any tax year is found by—
(a) first multiplying the capped amount by the appropriate percentage, and
(b) then multiplying the result by the availability factor.
(4) In subsection (3) the reference to “the appropriate percentage” is to the appropriate percentage for the car for the tax year (determined in accordance with sections 133 to 142).
(4A) For the purposes of subsection (3), “the availability factor” is given by the formula—
Y − U Y
where—
Y is the number of days in the tax year, and
U is the number of days in the tax year on which the car is unavailable.
(4B) For the purposes of subsection (4A), the 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.
(5) In this section “the capped amount” means 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 calculating under section 121B the modified cash equivalent of the benefit of the car for the tax year in question, and
(b) £5,000.
(6) This section is modified by section 147A (classic cars: optional remuneration arrangements).
(1) The “appropriate percentage” for a car for a year depends upon when the car was first registered.
(2) If the car was first registered on or after 1st January 1998, the “appropriate percentage” depends upon whether the car—
(a) is a car with a CO2 emissions figure (see section 134(1)),
(b) is a car without a CO2 emissions figure (see section 134(2)), or
(c) is a diesel car to which section 141 applies,
and is determined under sections 139 to 141.
(3) If the car was first registered before 1st January 1998, the “appropriate percentage” is determined under section 142.
134 Meaning of car with or without a CO2 emissions figure
(1) In this Chapter a “car with a CO2 emissions figure” means—
(a) a car first registered on or after 1st January 1998 but before 1st October 1999 to which section 135 applies,
(b) a car first registered on or after 1st October 1999 but before IP completion day to which section 136 (registration from 1st October 1999 to IP completion day) applies, ...
(ba) a car first registered on or after IP completion day to which section 136A (registration on or after IP completion day) applies,
(c) a car first registered on or after 1st January 2000 but before IP completion day which is a car to which section 137 (bi-fuel cars : registration from 1st January 2000 to IP completion day) applies , or
(d) a car first registered on or after IP completion day to which section 137A (bi-fuel cars: registration on or after IP completion day) applies.
(2) In this Chapter a “car without a CO2 emissions figure” means any other car first registered on or after 1st January 1998.
135 Car with a CO2 emissions figure: pre-October 1999 registration
(1) This section applies to a car first registered on or after 1st January 1998 but before 1st October 1999 if when it was so registered—
(a) it conformed to a vehicle type with an EC type-approval certificate (see section 171(1)), or
(b) it had a UK approval certificate (see section 171(1)),
which specifies a CO2 emissions figure in terms of grams per kilometre driven.
(2) The car’s CO2 emissions figure is that specified figure.
(3) This is subject to section 138 (automatic car for a disabled employee).
136 Car with a CO2 emissions figure: registration from 1st October 1999 to IP completion day
(1) This section applies to a car first registered on or after 1st October 1999 but before IP completion day if it is so registered on the basis of—
(a) an EC certificate of conformity (see section 171(1)), or
(b) a UK approval certificate (see section 171(1)),
which specifies a CO2 emissions figure in terms of grams per kilometre driven.
(2) The car’s CO2 emissions figure is that specified figure unless more than one figure is specified, in which case the car’s CO2 emissions figure is the figure specified as the CO2 emissions (combined) figure.
(2A) For the purpose of determining the car's CO2 emissions figure in a case where the car is first registered before 6 April 2020, ignore any WLTP (worldwide harmonised light vehicles test procedures) values specified in the EC certificate of conformity or UK approval certificate.
(2B) For the purpose of determining the car's CO2 emissions figure in a case where the car is first registered on or after 6 April 2020, ignore any values specified in the EC certificate of conformity or UK approval certificate that are not WLTP (worldwide harmonised light vehicle test procedures) values.
(3) Subsection (2) is subject to—
(a) section 137 (bi-fuel cars : registration from 1st January 2000 to IP completion day), and
(b) section 138 (automatic car for a disabled employee).
136A Car with a CO2 emissions figure: registration on or after IP completion day
(1) This section applies to a car first registered on or after IP completion day if it is so registered on the basis of a qualifying emissions certificate.
(2) The car’s CO2 emissions figure is the figure specified in the qualifying emissions certificate unless more than one figure is specified, in which case the car’s CO2 emissions figure is the figure specified as the CO2 emissions (combined) figure.
(3) For the purpose of determining the car’s CO2 emissions figure ignore any values specified in the qualifying emissions certificate that are not WLTP (worldwide harmonised light vehicles test procedures) values.
(4) Subsection (2) is subject to—
(a) section 137A (bi-fuel cars registered after IP completion day), and
(b) section 138 (automatic car for a disabled employee).
(5) Subsection (2) is also subject to section 138A (certain cars with a CO2 emissions figure and an electric range figure).
137 Car with a CO2 emissions figure: bi-fuel cars : registration from 1st January 2000 to IP completion day
(1) This section applies to a car first registered on or after 1st January 2000 but before IP completion day if it is so registered on the basis of—
(a) an EC certificate of conformity (see section 171(1)), or
(b) a UK approval certificate (see section 171(1)),
which specifies separate CO2 emissions figures in terms of grams per kilometre driven for different fuels.
(2) The car’s CO2 emissions figure is—
(a) the lowest figure specified, or
(b) if there is more than one figure specified in relation to each fuel, the lowest CO2 emissions (combined) figure specified.
(2A) For the purpose of determining the car's CO2 emissions figure in a case where the car is first registered before 6 April 2020, ignore any WLTP (worldwide harmonised light vehicles test procedures) values specified in the EC certificate of conformity or UK approval certificate.
(2B) For the purpose of determining the car's CO2 emissions figure in a case where the car is first registered on or after 6 April 2020, ignore any values specified in the EC certificate of conformity or UK approval certificate that are not WLTP (worldwide harmonised light vehicle test procedures) values.
(3) Subsection (2) is subject to section 138 (automatic car for a disabled employee).
137A Car with a CO2 emissions figure: bi-fuel cars registered on or after IP completion day
(1) This section applies to a car first registered on or after IP completion day if it is so registered on the basis of a qualifying emissions certificate which specifies separate CO2 emissions figures in terms of grams per kilometre driven for different fuels.
(2) The car’s CO2 emissions figure is—
(a) the lowest figure specified, or
(b) if there is more than one figure specified in relation to each fuel, the lowest CO2 emissions (combined) figure specified.
(3) For the purpose of determining the car’s CO2 emissions figure ignore any values specified in the qualifying emissions certificate that are not WLTP (worldwide harmonised light vehicles test procedures) values.
(4) Subsection (2) is subject to section 138 (automatic car for a disabled employee).
138 Car with a CO2 emissions figure: automatic car for a disabled employee
(1) This section applies where—
(a) a car with a CO2 emissions figure has automatic transmission (“the automatic car”),
(b) at any time in the year when the automatic car is available to the employee (“E”), E holds a disabled person’s badge, and
(c) by reason of E’s disability, E must, in the event of wanting to drive a car, drive a car which has automatic transmission.
(2) If, under sections 135 to 137, the automatic car’s CO2 emissions figure is more than it would have been if the automatic car had been an equivalent manual car, the CO2 emissions figure for the automatic car is to be the CO2 emissions figure for an equivalent manual car.
(3) In subsection (2) “an equivalent manual car” means a car which—
(a) is first registered at or about the same time as the automatic car, and
(b) does not have automatic transmission, but otherwise is the closest variant available of the make and model of the automatic car.
(4) For the purposes of this section a car has automatic transmission if—
(a) the driver of the car is not provided with any means by which the driver may vary the gear ratio between the engine and the road wheels independently of the accelerator and the brakes, or
(b) the driver is provided with such means, but they do not include—
(i) a clutch pedal, or
(ii) a lever which the driver may operate manually.
(5) For the purposes of this section a car is available to an employee at a particular time if it is then made available, by reason of the employment and without any transfer of the property in it, to the employee.
138A Certain cars with a CO2 emissions figure and an electric range figure
(1) This section applies to a car if—
(a) the car was first registered under VERA 1994 on or after 1 January 2025 and before 6 April 2028,
(b) the car’s CO2 emissions figure (as determined under section 136A) is 51 or more,
(c) the CO2 emissions figure or (as the case may be) the CO2 emissions (combined) figure specified in the car’s qualifying emissions certificate was calculated in accordance with an emission standard other than the Euro 6d-ISC-FCM emission standard or the Euro 6e emission standard, and
(d) the car’s electric range figure is 1 or more.
(2) For the purposes of this Chapter, the car is to be treated as having a CO2 emissions figure of 1.
(3) In this section—
“electric range figure” is the number of miles which is the equivalent of the number of kilometres specified in an EC certificate of conformity, an EC type-approval certificate or a UK approval certificate on the basis of which a car is registered, as being the maximum distance for which the car can be driven in electric mode without recharging the battery;
“Euro 6d-ISC-FCM emission standard” and “Euro 6e emission standard” have the same meaning as in Schedule 3A to the Vehicle Emissions Trading Schemes Order 2023 (alternative specific emissions of CO2: OVC hybrid electric vehicles) (S.I. 2023/1394) (see paragraph 1 of that Schedule).
(4) For the purposes of this section, in determining the electric range figure for a car, ignore any values specified in an EC certificate of conformity, an EC type-approval certificate or a UK approval certificate that are not WLTP (worldwide harmonised light vehicle test procedures) values.
139 Cars with a CO2 emissions figure: the appropriate percentage
(1) The appropriate percentage for a year for a car with a CO2 emissions figure of less than 75 is determined in accordance with the following table.
Car | Appropriate percentage
Car with CO2 emissions figure of 0 | 4%
Car with CO2 emissions figure of 1–50 | As follows
Car with electric range figure of 130 or more | 4%
Car with electric range figure of 70–129 | 7%
Car with electric range figure of 40–69 | 10%
Car with electric range figure of 30–39 | 14%
Car with electric range figure of less than 30 | 16%
Car with CO2 emissions figure of 51–54 | 17%
Car with CO2 emissions figure of 55–59 | 18%
Car with CO2 emissions figure of 60–64 | 19%
Car with CO2 emissions figure of 65–69 | 20%
Car with CO2 emissions figure of 70–74 | 21%
(2) For the purposes of subsection (1) and the table—
(a) if a CO2 emissions figure is not a whole number, round it down to the nearest whole number, and
(b) if an electric range figure is not a whole number, round it up to the nearest whole number.
(3) The appropriate percentage for a year for a car with a CO2 emissions figure of 75 or more is whichever is the lesser of—
(a) 21% plus one percentage point for each 5 grams per kilometre driven by which the CO2 emissions figure exceeds 75, and
(b) 37%.
(4) For the purposes of subsection (3), if a CO2 emissions figure is not a multiple of 5, round it down to the nearest multiple of 5.
(5) In this section, an “electric range figure” is the number of miles which is the equivalent of the number of kilometres specified in an EC certificate of conformity, an EC type-approval certificate or a UK approval certificate on the basis of which a car is registered, as being the maximum distance for which the car can be driven in electric mode without recharging the battery.
(5A) For the purpose of determining the electric range figure for a car first registered before 6 April 2020, ignore any WLTP (worldwide harmonised light vehicle test procedures) values specified in an EC certificate of conformity, an EC type-approval certificate or a UK approval certificate.
(5B) For the purpose of determining the electric range figure for a car first registered on or after 6 April 2020, ignore any values specified in an EC certificate of conformity, an EC type-approval certificate or a UK approval certificate that are not WLTP (worldwide harmonised light vehicle test procedures) values.
(7) This section is subject to—
(a) section 141 (diesel cars), and
(b) any regulations made by the Treasury under section 170(4) (power to reduce the appropriate percentage).
140 Car without a CO2 emissions figure: the appropriate percentage
(1) The appropriate percentage for a year for a car without a CO2 emissions figure is determined under this section.
(2) If the car has an internal combustion engine with one or more reciprocating pistons, the appropriate percentage for the year is—
Table
Cylinder capacity of car in cubic centimetres | Appropriate percentage
1,400 or less | 18% 20% 24%
More than 1,400 but not more than 2,000 | 29% 31% 35%
More than 2,000 | 37%
For this purpose a car’s cylinder capacity is the capacity of its engine as calculated for the purposes of VERA 1994.
(3) If subsection (2) does not apply, the appropriate percentage for the year is—
(a) 9% 13% 16% 2% if the car cannot in any circumstances emit CO2 by being driven, and
(b) 37% in any other case.
(3A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(5) This section is subject to—
(a) section 141 (diesel cars), and
(b) any regulations made by the Treasury under section 170(4) (power to reduce the appropriate percentage).
(1) This section applies to a diesel car first registered on or after 1 January 1998 but before 1 September 2017.
(1A) This section applies to a diesel car first registered on or after 1 September 2017 if it does not meet the Euro 6d emissions standard.
(2) To determine the appropriate percentage for the car for a year—
Step 1
Determine whether the car is a car with a CO2 emissions figure or a car without a CO2 emissions figure (see section 134).
Step 2
Take what would be the appropriate percentage for the car for the year under section 139 or 140 as appropriate.
Step 3
The appropriate percentage for the car for the year is whichever is the smaller of—
(a) the figure resulting from the addition of 4 percentage points to the figure found under step 2, and
(b) 35%.
(2A) A vehicle meets the Euro 6d emissions standard only if it is first registered on the basis of an EC certificate of conformity which indicates that the exhaust emission level is Euro 6d (and it does not meet that standard if it is first registered on the basis of an EC certificate of conformity which indicates that that level is Euro 6d-TEMP).
(3) In this section “diesel car” means a car which is propelled solely by diesel.
(4) This section is subject to any regulations made by the Treasury under section 170(4) (power to reduce the appropriate percentage).
142 Car first registered before 1st January 1998: the appropriate percentage
(1) The appropriate percentage for a car first registered before 1st January 1998 is determined under this section.
(2) If the car has an internal combustion engine with one or more reciprocating pistons, the appropriate percentage for the year is—
Table
Cylinder capacity of car in cubic centimetres | Appropriate percentage
1,400 or less | 24%
More than 1,400 but not more than 2,000 | 35%
More than 2,000 | 37%
For this purpose a car’s cylinder capacity is the capacity of its engine as calculated for the purposes of VERA 1994.
(3) If subsection (2) does not apply, the appropriate percentage for the year is 37%.
(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(A1) This section has effect for the purposes of—
(a) section 121(1) (method of calculating the cash equivalent of the benefit of a car), and
(b) section 121B(1) (optional remuneration arrangements: meaning of “modified cash equivalent”).
(1) A deduction is to be made from the amount carried forward from step 6 of section 121(1) or (as the case may be) step 4 of section 121B(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—
U
Y
×
A
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 of section 121(1) or (as the case may be) step 4 of section 121B(1) .
(4) This section is subject to section 145 (modification where car temporarily replaced).
(1) A deduction is to be made from the provisional sum (see subsection (1A)) 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) pays that amount on or before 6 July following that year.
(1A) In this section “the provisional sum” means the provisional sum calculated under—
(a) step 7 of section 121(1) (method of calculating the cash equivalent of the benefit of a car), or
(b) step 2 of section 121A(1) (optional remuneration arrangements: method of calculating relevant amount).
(2) If the amount paid as mentioned in subsection (1)(b) by the employee in respect of that year is equal to or exceeds the provisional sum, the provisional sum is reduced so that—
(a) in a case within subsection (1A)(a), the cash equivalent of the benefit of the car for the year is nil, or
(b) in a case within subsection (1A)(b), the relevant amount for the purposes of section 120A is nil.
(3) Where subsection (2) does not apply, the amount paid as mentioned in subsection (1)(b) by the employee in respect of the year is deducted from the provisional sum in order to give—
(a) in a case within subsection (1A)(a), the cash equivalent of the benefit of the car for the year, or
(b) in a case within subsection (1A)(b), the relevant amount for the purposes of section 120A.
(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).
145 Modification of provisions 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—
(i) in respect of both the normal car and the replacement car by virtue of section 120, or
(ii) in respect of both the normal car and the replacement car by virtue of section 120A, 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 3 of section 121(1) is materially higher than the interim sum calculated in relation to the normal car.
(6) Where this section applies by virtue of subsection (1)(c)(ii), the condition in subsection (5)(b) is to be taken to be met if it would be met on the assumption that the cash equivalent of the benefit of the cars in question is to be calculated under section 121(1).
(1) This section applies for the purposes of sections 121 and 121B 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) or (as the case may be) step 1 of section 121B(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 interim sum calculated under step 3 of section 121(1).
(2) For the interim sum calculated under 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 in calculating the relevant amount in respect of a car for a tax year for the purposes of section 120A (benefit of car treated as earnings: optional remuneration arrangements) 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 specified amount (see subsection (4)).
(2) In calculating the modified cash equivalent of the benefit of the car, for the interim sum calculated under step 2 of section 121B(1) substitute the market value of the car for the tax year in question.
(3) Section 132A (capital contributions by employee: optional remuneration arrangements) has effect as if—
(a) in subsection (1)(b) the reference to calculating under section 121B the modified cash equivalent of the benefit of the car were to determining the market value of the car, and
(b) in subsection (5)(a)(ii) the reference to calculating under section 121B the modified cash equivalent of the benefit of the car for the tax year in question were to determining the market value of the car for the tax year in question.
(4) The “specified amount” is found as follows.
Step 1 Find what would be the interim sum under step 2 of section 121B(1) (if subsection (2) of this section did not have effect).
Step 2 (Assuming for this purpose that the reference in section 132(2) to step 2 of section 121(1) includes a reference to step 1 of this subsection) make any deduction under section 132 for capital contributions made by the employee to the cost of the car or accessories.
The resulting amount is the specified amount.
(5) The market value of a car for a tax year is to be determined in accordance with section 147(3) and (4).
148 Reduction of cash equivalent where car is shared
(1) This section applies for the purposes of sections 121 and 121B 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 sections 120 and 120A .
(2) The amount to be treated as earnings in respect of the benefit of the car is to be calculated separately for each of those employees for that tax year (whether under section 120 or section 120A).
(2A) In the case of an employee chargeable to tax in respect of the car by virtue of section 120 The provisional sum calculated under step 7 in section 121(1) is to be reduced on a just and reasonable basis before making any deduction under step 8.
(2B) In the case of an employee chargeable to tax in respect of the car by virtue of section 120A, the modified cash equivalent (as determined under section 121B(1)) is to be reduced on a just and reasonable basis.
(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(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 or 120A,
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 or any energy for a car which cannot in any circumstances emit CO2 by being driven.
149A Benefit of car fuel treated as earnings: optional remuneration arrangements
(1) This section applies if—
(a) fuel is provided for a car in a tax year by reason of an employee's employment,
(b) the employee is chargeable to tax in respect of the car in the tax year by virtue of section 120 or 120A, and
(c) the fuel is provided pursuant to optional remuneration arrangements.
(2) If the condition in subsection (3) is met—
(a) the amount foregone with respect to the benefit of the fuel (see section 69B) is to be treated as earnings from the employment for the tax year, and
(b) section 149(1) does not apply.
(3) The condition mentioned in subsection (2) is that the amount foregone with respect to the benefit of the fuel is greater than the cash equivalent of the benefit of the fuel.
(4) For the purposes of subsection (3), assume that the cash equivalent of the benefit of the fuel is zero if the condition in subsection (5) is met.
(5) The condition mentioned in subsection (4) is that the benefit of the fuel would be exempt from income tax but for section 228A (exclusion of certain exemptions).
(6) References in this section to fuel do not include any facility or means for supplying electrical energy or any energy for a car which cannot in any circumstances emit CO2 by being driven.
(7) Where it is necessary for the purposes of subsections (2)(a) and (3) to apportion an amount of earnings to the benefit of the fuel in the tax year, the apportionment is to be made on a just and reasonable basis.
In this subsection “earnings” is to be interpreted in accordance with section 69B(5).
(1) The cash equivalent of the benefit of the fuel is the appropriate percentage of £29,200.
(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 ...—
(a) in the tax year in question, 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 on or before 6 July following that tax year .
(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)).
152 Car fuel: proportionate reduction of cash equivalent
(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 ...—
(a) for any part of the tax year in question, the facility for the provision of fuel as mentioned in section 149(1) is not available,
(b) for any part of the tax year in question, the fuel is made available only for business travel (see section 171(1)), or
(c) the employee—
(i) for any part of the tax year in question, 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
(ii) the employee does make good that expense on or before 6 July following that tax year
(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—
CE
×
Y
-
D
Y
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.
(1) 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.
(2) In such a case (including a case where the cash equivalent of the benefit of the van is nil) the employee is referred to in this Chapter as being chargeable to tax in respect of the van for that year.
(3) Any reference in this Act to a case where the cash equivalent of the benefit of a van is treated as the employee's earnings for a year by virtue of this section includes a case where the cash equivalent is nil.
(4) This section is subject to section 154A.