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

Chapter 6Taxable benefits: cars, vans and related benefits

Cars: unavailability or payments for private use

144Deduction for payments for private use

(1)

A deduction is to be made from the provisional sum F1(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

F2(b)

pays that amount F3on or before 6 July following that year.

F4(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 F5as 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 F6so 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)

F7Where subsection (2) does not apply, the amount paid F8as mentioned in subsection (1)(b) by the employee in respect of the year is deducted from the provisional sum in order to F9give—

(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).