Income and Corporation Taxes Act 1988

157Cars available for private use

(1)Where in any year in the case of a person employed in director’s or higher-paid employment, a car is made available (without any transfer of the property in it) either to himself or to others being members of his family or household, and—

(a)it is so made available by reason of his employment and it is in that year available for his or their private use; and

(b)the benefit of the car is not (apart from this section) chargeable to tax as the employee’s income,

there is to be treated as emoluments of the employment, and accordingly chargeable to income tax under Schedule E, an amount equal to whatever is the cash equivalent of that benefit in that year.

(2)Subject to the provisions of this section, the cash equivalent of that benefit is to be ascertained—

(a)from Tables A and B in Part I of Schedule 6, in the case of cars with an original market value of up to £19,250; and

(b)from Table C in that Part in the case of cars with an original market value of more than that amount;

the equivalent in each case being shown in the second or third column of the applicable Table by reference to the age of the car at the end of the relevant year of assessment.

(3)Where in any year the benefit of a car is chargeable to tax under this section as the employee’s income he shall not be taxable—

(a)under Schedule E in respect of the discharge of any liability of his in connection with the car;

(b)under section 141 or 142 in respect of any non-cash voucher or credit-token to the extent that it is used by him—

(i)for obtaining money which is spent on goods or services in connection with the car; or

(ii)for obtaining such goods or services;

(c)under section 153 in respect of any payment made to him in respect of expenses incurred by him in connection with the car.

(4)The Treasury may by order taking effect from the beginning of any year beginning after it is made—

(a)increase or further increase the money sum specified in subsection (2)(a) above;

(b)with or without such an increase, substitute for any of the three Tables a different Table of cash equivalents;

(c)increase or further increase the money sum specified in paragraph 1(1) of Part II of Schedule 6.

(5)Part II of Schedule 6 has effect—

(a)with respect to the application of the Tables in Part I; and

(b)for the reduction of the cash equivalent under this section in cases where the car has not been available for the whole of the relevant year, or the use of it has been preponderantly business use, or the employee makes any payment for the use of it.