Part 3 U.K.Employment income: earnings and benefits etc. treated as earnings

Chapter 6 U.K.Taxable benefits: cars, vans and related benefits

Modifications etc. (not altering text)

C1 Pt. 3 Ch. 6 modified (6.4.2020 for the tax year 2020-21) by Finance Act 2020 (c. 14), s. 9

C2 Pt. 3 Ch. 6 modified (6.4.2021 for the tax year 2021-22) by Finance Act 2020 (c. 14), s. 10

Cars: capital contributions by employee U.K.

132 Capital contributions by employee U.K.

(1) This section applies [F1 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.

Textual Amendments

F1 Words in s. 132(1) inserted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 26