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

General

114Cars, vans and related benefits

1

This Chapter applies to a car or a van in relation to a particular tax year if in that year the car or van—

a

is made available (without any transfer of the property in it) to an employee or a member of the employee’s family or household,

b

is so made available by reason of the employment (see section 117), and

c

is available for the employee’s or member’s private use (see section 118).

F141A

Where this Chapter applies to a car or van, the car or van is a benefit for the purposes of this Chapter (and accordingly it is immaterial whether the terms on which it is made available to the employee or member constitute a fair bargain).

2

Where this Chapter applies to a car or van—

a

sections 120 to 148 provide for F11an amount in respect of the benefit of the car to be treated as earnings,

b

sections 149 to 153 provide for F4an amount in respect of the benefit of any fuel provided for the car to be treated as earnings, F15...

c

sections 154 to F8159 provide for F1an amount in respect of the benefit of the van to be treated as earningsF2; and

d

sections 160 to 164 provide for F10an amount in respect of the benefit of any fuel provided for the van to be treated as earnings in certain circumstances.

F33

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F123A

This Chapter does not apply to a van in relation to a tax year if the private use of the van during the tax year by the employee or member of the employee’s family or household is insignificant.

4

The following provisions of this Chapter provide for further exceptions—

  • section 167 (pooled cars);

  • section 168 (pooled vans);

  • section 169 (car available to more than one member of family or household employed by same employer).

  • F7section 169A (van available to more than one member of family or household employed by same employer).

115Meaning of “car” and “van”

1

In this Chapter—

  • “car” means a mechanically propelled road vehicle which is not—

    1. a

      a goods vehicle,

    2. b

      a motor cycle,

    3. c

      an invalid carriage, or

    4. d

      a vehicle of a type not commonly used as a private vehicle and unsuitable to be so used;

  • “van” means a mechanically propelled road vehicle which—

    1. a

      is a goods vehicle, and

    2. b

      has a design weight not exceeding 3,500 kilograms,

    and which is not a motor cycle.

2

For the purposes of subsection (1)—

  • “design weight” means the weight which a vehicle is designed or adapted not to exceed when in normal use and travelling on a road laden;

  • “goods vehicle” means a vehicle of a construction primarily suited for the conveyance of goods or burden of any description;

  • “invalid carriage” has the meaning given by section 185(1) of the Road Traffic Act 1988 (c. 52);

  • “motor cycle” has the meaning given by section 185(1) of the Road Traffic Act 1988.

116Meaning of when car or van is available to employee

1

For the purposes of this Chapter a car or van 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 or a member of the employee’s family or household.

2

References in this Chapter to—

a

the time when a car F5or van is first made available to an employee are to the earliest time when the car F5or van is made available as mentioned in subsection (1), and

b

the last day in a year on which a car F5or van is available to an employee are to the last day in the year on which the car F5or van is made available as mentioned in subsection (1).

3

This section does not apply to section F6124A or 138 (automatic car F5or van for a disabled employee).

F16117Meaning of car or van made available by reason of employment

1

For the purposes of this Chapter a car or van made available by an employer to an employee or member of an employee's family or household is to be regarded as made available by reason of the employment unless subsection (2) or (3) excludes the application of this subsection.

2

Subsection (1) does not apply where—

a

the employer is an individual, and

b

the car or van in question is made available in the normal course of the employer's domestic, family or personal relationships.

3

Subsection (1) does not apply where—

a

the employer carries on a vehicle hire business under which cars or vans of the same kind are made available to members of the public for hire,

b

the car or van in question is hired to the employee or member in the normal course of that business, and

c

in hiring that car or van the employee or member is acting as an ordinary member of the public.

118Availability for private use

1

For the purposes of this Chapter a car or van made available in a tax year to an employee or a member of the employee’s family or household is to be treated as available for the employee’s or member’s private use unless in that year—

a

the terms on which it is made available prohibit such use, and

b

it is not so used.

2

In this Chapter “private use”, in relation to a car or van made available to an employee or a member of the employee’s family or household, means any use other than for the employee’s business travel (see section 171(1)).

119Where alternative to benefit of F9low emission car F17or van offered

F131

This section applies where in a tax year—

a

a car is made available as mentioned in section 114(1),

b

the car's CO2 emissions figure (see sections 133 to 138) does not exceed 75 grams per kilometre, and

c

an alternative to the benefit of the car is offered.

2

The mere fact that the alternative is offered does not result in an amount in respect of the benefit constituting earnings by virtue of Chapter 1 of this Part (earnings).