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

C2C1Chapter 6Taxable benefits: cars, vans and related benefits

Annotations:
Modifications etc. (not altering text)
C2

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

C1

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

Cars: special cases

147Classic cars: 15 years of age or more

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 F1interim sum calculated under step 3 of section 121(1).

2

For the F2interim 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.