Finance Act 2009

54 Taxable benefit of cars: price of automatic car for disabled employee

(1) Chapter 6 of Part 3 of ITEPA 2003 (taxable benefits: cars etc) is amended as follows.

(2) In section 116(3) (meaning of when car is available), after “to section” insert “124A or”.

(3) In section 121(1) (method of calculating cash equivalent of benefit of car), in step 1, for “124” substitute “124A”.

(4) In section 122 (price of car), the existing provision becomes subsection (1) of that section and after that subsection insert—

“(2) This is subject to section 124A (automatic car for a disabled employee).”

(5) After section 124 insert—

“124A Automatic car for a disabled employee

(1) This section applies where—

(a) a car has automatic transmission (“the automatic car”),

(b) at any time in the year when the automatic car is available to the employee (“E”), E holds a disabled person’s badge, and

(c) by reason of E’s disability, E must, in the event of wanting to drive a car, drive a car which has automatic transmission.

(2) If, under section 122 to 124, the price of the automatic car is more than it would have been if the automatic car had been an equivalent manual car, the price of the automatic car is to be the price of an equivalent manual car.

(3) In subsection (2) “an equivalent manual car” means a car which—

(a) is first registered at or about the same time as the automatic car, and

(b) does not have automatic transmission, but otherwise is the closest variant available of the make and model of the automatic car.

(4) For the purposes of this section a car has automatic transmission if—

(a) the driver of the car is not provided with any means by which the driver may vary the gear ratio between the engine and the road wheels independently of the accelerator and the brakes, or

(b) the driver is provided with such means, but they do not include—

(i) a clutch pedal, or

(ii) a lever which the driver may operate manually.

(5) For the purposes of this section a car 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.”

(6) The amendments made by this section have effect for the tax year 2009-10 and subsequent tax years.