Part 3Employment income: earnings and benefits etc. treated as earnings
C2C1Chapter 6Taxable benefits: cars, vans and related benefits
Pt. 3 Ch. 6 modified (6.4.2021 for the tax year 2021-22) by Finance Act 2020 (c. 14), s. 10
Cars: unavailability or payments for private use
144Deduction for payments for private use
1
A deduction is to be made from the provisional sum F5(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
F91A
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 F6as 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 F3so 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 F4give—
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).
Pt. 3 Ch. 6 modified (6.4.2020 for the tax year 2020-21) by Finance Act 2020 (c. 14), s. 9