PART V PROVISIONS RELATING TO THE SCHEDULE E CHARGE
CHAPTER IIF21EMPLOYEES EARNING £8,500 OR MORE AND DIRECTORS
Expenses
153 Payments in respect of expenses.
M11
Subject to the provisions of this Chapter, where in any year a person is employed in F22employment to which this Chapter applies and by reason of his employment there are paid to him in respect of expenses any sums which, apart from this section, are not chargeable to tax as his income, those sums are to be treated as emoluments of the employment and accordingly chargeable to income tax under Schedule E.
2
Subsection (1) above is without prejudice to any claim for deductions under section 198, 201 or 332(3).
3
The reference in subsection (1) above to sums paid in respect of expenses includes any sums put at the employee’s disposal by reason of his employment and paid away by him.
Benefits in kind
154 General charging provision.
M21
Subject to section 163, where in any year a person is employed in F23employment to which this Chapter applies and—
a
by reason of his employment there is provided for him, or for others being members of his family or household, any benefit to which this section applies; and
b
the cost of providing the benefit is not (apart from this section) chargeable to tax as his 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 the benefit.
2
The benefits to which this section applies are accommodation (other than living accommodation), entertainment, domestic or other services, and other benefits and facilities of whatsoever nature (whether or not similar to any of those mentioned above in this subsection), excluding however—
a
any benefit consisting of the right to receive, or the prospect of receiving, any sums which would be chargeable to tax under section 149; and
b
any benefit chargeable under section 157, 158, 160 or 162;
and subject to the exceptions provided for by F24sections 155 and 155A.
3
For the purposes of this section and sections 155 and 156, the persons providing a benefit are those at whose cost the provision is made.
155 Exceptions from the general charge.
1
M3Where the benefit of a car is taxable under section 157, section 154 does not apply to any benefit in connection with the car other than a benefit in connection with the provision of a driver for the car.
F251A
Section 154 does not apply to a benefit consisting in the provision for the employee of a car parking space at or near his place of work.
2
M4Section 154 does not apply where the benefit consists in provision for the employee, in premises occupied by the employer or others providing it, of accommodation, supplies or services used by the employee solely in performing the duties of his employment.
3
M5Where living accommodation is provided by reason of a person’s employment—
a
alterations and additions to the premises concerned which are of a structural nature, and
b
repairs to the premises of a kind which, if the premises were let under a lease to which section 11 of the M6Landlord and Tenant Act 1985 (repairing obligations) applies, would be the obligation of the lessor under the covenants implied by subsection (1) of that section,
are not benefits to which section 154 applies.
4
M7Section 154 does not apply to a benefit consisting in the provision by the employee’s employer for the employee himself, or for the spouse, children or dependants of the employee, of any pension, annuity, lump sum, gratuity or other like benefit to be given on the employee’s death or retirement.
5
M8Section 154 does not apply to a benefit consisting in the provision by the employee’s employer of meals in any canteen in which meals are provided for the staff generally.
6
M9Section 154 does not apply where the benefit consists—
a
in providing the employee with medical treatment outside the United Kingdom (including providing for him to be an in-patient) in a case where the need for the treatment arises while the employee is outside the United Kingdom for the purpose of performing the duties of his employment; or
b
in providing insurance for the employee against the cost of such treatment in such a case;
and for the purpose of this subsection, medical treatment includes all forms of treatment for, and all procedures for diagnosing, any physical or mental ailment, infirmity or defect.
F267
Section 154 does not apply to a benefit consisting in the provision of entertainment (including hospitality of any kind) for the employee, or for members of his family or household, if—
a
the person providing the benefit is neither his employer nor a person connected with his employer;
b
neither his employer nor a person connected with his employer has directly or indirectly procured its provision; and
c
it is not provided either in recognition of particular services which have been performed by the employee in the course of his employment or in anticipation of particular services which are to be so performed by him;
and section 839 shall apply for determining whether persons are connected for the purposes of this subsection.
F5155ZA Accommodation, supplies or services used in performing duties of employment.
1
Section 154 does not apply to a benefit consisting in the provision of accommodation, supplies or services used by the employee in performing the duties of his employment if the following conditions are met.
2
Where the benefit is provided on premises occupied by the employer or other person providing it, the only condition is that any use of it for private purposes by the employee or members of his family or household is not significant.
3
Where the benefit is provided otherwise than on premises occupied by the employer or other person providing it, the conditions are—
a
that the sole purpose of providing the benefit is to enable the employee to perform the duties of his employment,
b
that any use of it for private purposes is not significant, and
c
that it is not an excluded benefit.
4
The Treasury may make provision by regulations as to what is an excluded benefit for the purposes of subsection (3)(c) above.
The regulations may provide that a benefit is an excluded benefit only if such conditions as may be prescribed are met as to the terms on which, and persons to whom, it is provided.
5
Subject to any such regulations, the provision of any of the following is an excluded benefit (whatever the terms and whoever it is provided to)—
a
a motor vehicle, boat or aircraft;
b
a benefit that involves—
i
the extension, conversion or alteration of any living accommodation, or
ii
the construction, extension, conversion or alteration of a building or other structure on land adjacent to and enjoyed with such accommodation.
6
For the purposes of this section—
a
use “for private purposes” means any use that is not use in performing the duties of the employee’s employment; and
b
use that is at the same time use in performing the duties of an employee’s employment and use for private purposes counts as use for private purposes.
F6155ZB Power to provide for exemption of minor benefits.
1
The Treasury may make provision by regulations for exempting from section 154 such minor benefits as may be specified in the regulations.
2
Any exemption conferred by regulations under this section is conditional on the benefit being made available to the employer’s employees generally on similar terms.
F7155AA Mobile telephones.
1
Section 154 does not apply where the benefit consists in a mobile telephone being made available (without any transfer of the property in it) to the employee or to a member of his family or household.
2
In this section “mobile telephone” means wireless telegraphy apparatus designed or adapted for the purpose of transmitting and receiving spoken messages so as to provide a telephone which—
a
is connected to a public telecommunication system (within the meaning of the M54Telecommunications Act 1984); and
b
is not physically connected to a land-line;
but does not include any cordless telephone or any telepoint telephone.
3
The mobile telephones to which the exemption provided by this section applies include any mobile telephone provided in connection with a car, van or heavier commercial vehicle, notwithstanding that the vehicle is made available as mentioned in section 157, section 159AA or, as the case may be, section 159AC.
4
In this section “cordless telephone” means wireless telegraphy apparatus which (whether or not provided in connection with a car, van or heavier commercial vehicle)—
a
is designed or adapted for the purpose of transmitting and receiving spoken messages so as to provide a wireless extension to a telephone, and
b
is used only as such an extension to a telephone that is physically connected to a land-line.
5
In this section “telepoint telephone” means wireless telegraphy apparatus which (whether or not provided in connection with a car, van or heavier commercial vehicle) is used for the purpose of a short-range radio communications service utilising frequencies between 864 and 868 megahertz (inclusive).
6
In this section “heavier commercial vehicle” has the same meaning as in section 159AC.
155AF1 Care for children.
1
Where a benefit consists in the provision for the employee of care for a child, section 154 does not apply to the benefit to the extent that it is provided in qualifying circumstances.
2
For the purposes of subsection (1) above the benefit is provided in qualifying circumstances if—
a
the child falls within subsection (3) below,
b
the care is provided on premises which are not domestic premises,
c
the condition set out in subsection (4) below or the condition set out in subsection (5) below (or each of them) is fulfilled, and
d
in a case where the registration requirement applies, it is met.
3
The child falls within this subsection if—
a
he is a child for whom the employee has parental responsibility,
b
he is resident with the employee, or
c
he is a child of the employee and maintained at his expense.
4
The condition is that the care is provided on premises which are made available by the employer alone.
5
The condition is that—
a
the care is provided under arrangements made by persons who include the employer,
b
the care is provided on premises which are made available by one or more of those persons, and
c
under the arrangements the employer is wholly or partly responsible for financing and managing the provision of the care.
6
The registration requirement applies where—
a
b
any person providing the care is required to be registered under section 71 of the M12Children Act 1989 with respect to the premises on which it is provided;
and the requirement is met if the premises are so registered or (as the case may be) the person is so registered.
7
In subsection (3)(c) above the reference to a child of the employee includes a reference to a stepchild of his.
8
In this section—
“care” means any form of care or supervised activity, whether or not provided on a regular basis, but excluding supervised activity provided primarily for educational purposes;
“child” means a person under the age of eighteen;
“domestic premises” means any premises wholly or mainly used as a private dwelling;
“parental responsibility” has the meaning given in section 3(1) of the Children Act 1989.
156 Cash equivalent of benefits charged under section 154.
1
M13The cash equivalent of any benefit chargeable to tax under section 154 is an amount equal to the cost of the benefit, less so much (if any) of it as is made good by the employee to those providing the benefit.
2
Subject to the following subsections, the cost of a benefit is the amount of any expense incurred in or in connection with its provision, and (here and in those subsections) includes a proper proportion of any expense relating partly to the benefit and partly to other matters.
3
Where the benefit consists in the transfer of an asset by any person, and since that person acquired or produced the asset it has been used or has depreciated, the cost of the benefit is deemed to be the market value of the asset at the time of transfer.
4
M14Where the asset referred to in subsection (3) above is not a car and before the transfer a person (whether or not the transferee) has been chargeable to tax in respect of the asset in accordance with subsection (5) below, the amount which under subsection (3) above is deemed to be the cost of the benefit shall (if apart from this subsection it would be less) be deemed to be—
a
the market value of the asset at the time when it was first applied (by those providing the benefit in question) for the provision of any benefit for a person, or for members of his family or household, by reason of his employment, less
b
the aggregate of the amounts taken into account as the cost of the benefit in charging tax in accordance with subsection (5) below in the year or years up to and including that in which the transfer takes place.
5
M15Where the benefit consists in an asset being placed at the employee’s disposal, or at the disposal of others being members of his family or household, for his or their use (without any transfer of the property in the asset), or of its being used wholly or partly for his or their purposes, then the cost of the benefit in any year is deemed to be—
a
the annual value of the use of the asset ascertained under subsection (6) below; plus
b
the total of any expense incurred in or in connection with the provision of the benefit excluding—
i
the expense of acquiring or producing it incurred by the person to whom the asset belongs; and
ii
any rent or hire charge payable for the asset by those providing the benefit.
6
M16Subject to subsection (7) below, the annual value of the use of the asset, for the purposes of subsection (5) above—
a
in the case of land, is its annual value determined in accordance with section 837; and
b
in any other case is 20 per cent. of its market value at the time when it was first applied (by those providing the benefit in question) in the provision of any benefit for a person, or for members of his family or household, by reason of his employment.
7
M17Where there is payable, by those providing the benefit, any sum by way of rent or hire-charge for the asset, the annual amount of which is equal to, or greater than, the annual value of the use of the asset as ascertained under subsection (6) above, that amount shall be substituted for the annual value in subsection (5)(a) above.
8
M18From the cash equivalent there are deductible in each case under section 198, 201 or 332(3) such amounts (if any) as would have been so deductible if the cost of the benefit had been incurred by the employee out of his emoluments.
9
M19In the case of assets first applied before 6th April 1980 by those providing the benefit in question in the provision of any benefit for a person, or for members of his family or household, by reason of his employment—
a
subsection (4) above shall not have effect; and
b
in subsection (6)(b) above for the words “20 per cent.” there shall be substituted the words “
10 per cent.
”
.
F8156A Limited exemption for computer equipment.
1
This section applies to a benefit consisting in the provision of computer equipment if, in the case of a person (“the employee”) who is in employment to which this Chapter applies—
a
that equipment is provided by being made available to the employee or to a member of his family or household;
b
it is so made available without any transfer of property in the equipment to the employee or to a member of his family or household; and
c
it is so made available in a case in which the arrangements for providing employees of the employer with the benefit of computer equipment comply with subsection (2) below.
2
The arrangements for providing the employees of the employer with the benefit of computer equipment comply with this subsection unless—
a
the only arrangements for making computer equipment available to such employees, or to members of their families or households, are arrangements that are confined to cases where the employee in question is a director of a company; or
b
the arrangements (taking them all together) for making computer equipment available to employees of the employer, or to members of their families or households, are such that it is made available on terms that are more favourable in some or all of the cases where the employee in question is a director of a company than in one or more cases where he is not.
3
Section 154 applies for any year of assessment to—
a
the benefits to which this section applies that are provided in that year and consist in the making available to the employee of any equipment, and
b
the benefits to which this section applies that are provided in that year and consist in the making available to members of his family or household of any equipment,
to the extent only that the amount which (disregarding this section) would be taken to be the aggregate cash equivalent of the benefits falling within paragraphs (a) and (b) above exceeds £500.
4
For the purposes of this section “computer equipment” includes printers, scanners, modems, discs and other peripheral devices designed to be used by being connected to or inserted in a computer.
5
In this section references to making computer equipment available—
a
include references to the provision, together with any computer equipment made available, of a right to use computer software; but
b
do not include references to the provision of a benefit consisting in access to, or the use of, any public telecommunication system (within the meaning of the M55Telecommunications Act 1984).
157 Cars available for private use. C1
1
M20Where in any year in the case of a person employed in F27employment to which this Chapter applies, 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
M21Subject to the provisions of this section, the cash equivalent of that benefit is to be ascertained—
C2a
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
M22Where 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
M23The 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
M24Part 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.
F9157A Cars available for private use: cash alternative, etc.
Where, in any year in the case of a person employed in employment to which this Chapter applies—
a
a car is made available as mentioned in section 157, and
b
an alternative to the benefit of the car is offered,
the mere fact that the alternative is offered shall not make the benefit chargeable to tax under section 19(1).
158 Car fuel. C3
1
M25Where in any year in the case of a person employed in F28employment to which this Chapter applies fuel is provided by reason of his employment for a car which is made available as mentioned in section 157, an amount equal to whatever is the cash equivalent of that benefit in that year shall be treated as emoluments of the employment and, accordingly, shall be chargeable to income tax under Schedule E.
C42
M26Subject to the provisions of this section, the cash equivalent of that benefit shall be ascertained from Table A below where the car has an internal combustion engine with one or more reciprocating pistons and from Table B below in the case of other cars; and for the purposes of Table A below a car’s cylinder capacity is the capacity of its engine calculated as for the purposes of the M27Vehicles (Excise) Act 1971 or the M28Vehicles (Excise) Act (Northern Ireland) 1972.
Cylinder capacity of car in cubic centimetres | Cash equivalent |
|---|---|
1,400 or less | £480 |
More than 1,400 but not more than 2,000 | £600 |
More than 2,000 | £900 |
Original market value of car | Cash equivalent |
|---|---|
Less than £6,000 | £480 |
£6,000 or more but less than £8,500 | £600 |
£8,500 or more | £900 |
3
M29Without prejudice to the generality of subsection (1) above, fuel is provided for a car if—
a
any liability in respect of the provision of fuel for the car is discharged;
b
a non-cash voucher or a credit-token is used to obtain fuel for the car or money which is spent on such fuel;
c
any sum is paid in respect of expenses incurred in providing fuel for the car.
In this subsection “non-cash voucher” and “credit-token” have the meanings given by section 141(7) and 142(4) respectively.
4
The Treasury may by order taking effect from the beginning of any year beginning after it is made substitute a different Table for either of the Tables in subsection (2) above.
5
Where paragraph 2 or 3 of Part II of Schedule 6 applies to reduce the cash equivalent of the benefit of the car for which the fuel is provided, the same reduction shall be made to the cash equivalent of the benefit of the fuel ascertained under subsection (2) above.
6
If in the relevant year—
a
the employee is required to make good to the person providing the fuel the whole of the expense incurred by him in or in connection with the provision of fuel for his private use and he does so; or
b
the fuel is made available only for business travel;
the cash equivalent is nil.
159 Pooled cars. C5
M301
This section applies to any car in the case of which the inspector is satisfied (whether on a claim under this section or otherwise) that it has for any year been included in a car pool for the use of the employees of one or more employers.
2
A car is to be treated as having been so included for a year if—
a
in that year it was made available to, and actually used by, more than one of those employees and, in the case of each of them, it was made available to him by reason of his employment but it was not in that year ordinarily used by one of them to the exclusion of the others; and
b
in the case of each of them any private use of the car made by him in that year was merely incidental to his other use of it in the year; and
c
it was in that year not normally kept overnight on or in the vicinity of any residential premises where any of the employees was residing, except while being kept overnight on premises occupied by the person making the car available to them.
3
Where this section applies to a car, then for the year in question the car is to be treated under sections 154 and 157 as not having been available for the private use of any of the employees.
4
A claim under this section in respect of a car for any year may be made by any one of the employees mentioned in subsection (2)(a) above (referred to below as “the employees concerned”) or by the employer on behalf of all of them.
5
On an appeal against the decision of the inspector on a claim under this section all the employees concerned may take part in the proceedings, and the determination of the body of Commissioners or county court appealed to shall be binding on all those employees, whether or not they have taken part in the proceedings.
6
Where an appeal against the decision of the inspector on a claim under this section has been determined, no appeal against the inspector’s decision on any other such claim in respect of the same car and the same year shall be entertained.
F2159AA Vans available for private use.
1
Where in any year, in the case of a person employed in employment to which this Chapter applies, a van 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 van 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
The cash equivalent of the benefit in the year concerned shall be ascertained in accordance with Schedule 6A.
3
Where in any year the benefit of a van 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 van;
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 van, 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 van.
F3159AB Pooled vans.
Section 159 shall apply in relation to vans as it applies in relation to cars, and for the purposes of the application of that section to vans—
a
any reference in that section to a car shall be construed as a reference to a van,
b
the reference in subsection (1) of that section to a car pool shall be construed as a reference to a van pool, and
c
the reference in subsection (3) of that section to section 157 shall be construed as a reference to section 159AA.
F4159AC Heavier commercial vehicles available for private use.
1
This section applies where in any year—
a
a heavier commercial vehicle is made available to an employee in circumstances such that, had that vehicle been a van, the benefit so provided would have been chargeable to tax under section 159AA, and
b
the employee’s use of the vehicle is not wholly or mainly private use.
2
Section 154 shall not apply to—
a
the benefit so provided, or
b
any benefit in connection with the vehicle other than a benefit in connection with the provision of a driver for the vehicle.
3
The employee shall not be taxable—
a
under Schedule E in respect of the discharge of any liability of his in connection with the vehicle;
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 vehicle, 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 vehicle.
4
In this section “heavier commercial vehicle” means a mechanically propelled road vehicle which is—
a
of a construction primarily suited for the conveyance of goods or burden of any description, and
b
of a design weight exceeding 3,500 kilograms;
and “design weight” here means the weight which the vehicle is designed or adapted not to exceed when in normal use and travelling on a road laden.
5
In this section—
a
“private use”, in relation to a vehicle made available to an employee, means any use other than for his business travel, and
b
“business travel” means travelling which the employee is necessarily obliged to do in the performance of the duties of his employment.
159AF38 Mobile telephones.
1
Where in any year in the case of a person employed in employment to which this Chapter applies a mobile telephone is made available (without any transfer of the property in it) either to that person or to others who are 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 mobile telephone 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
The cash equivalent of a benefit taxable under this section in any year shall be £200 for each mobile telephone made available in that year, but subject to the following provisions of this section.
3
If for any year—
a
there is no private use of the mobile telephone, or
b
the employee is required to, and does, make good to the person providing the benefit the full cost of any private use of the mobile telephone,
then the cash equivalent of the benefit for that year is nil.
4
If the mobile telephone is unavailable for any part of a year, the cash equivalent of the benefit for that year shall be reduced by an amount which bears to that specified in subsection (2) above for that year the proportion which the number of days in the year on which the mobile telephone is unavailable bears to 365.
5
For the purposes of subsection (4) above, a mobile telephone is to be regarded as “unavailable” on any day if, and only if—
a
it is not made available as mentioned in subsection (1) above until after that day, or
b
it ceases to be so available before that day, or
c
it is incapable of being used at all throughout a period of not less than 30 consecutive days of which that day is one.
6
Where different mobile telephones are made available on different days in a year, the employee shall be treated for the purposes of this section as if the same mobile telephone (or, in a case where two or more mobile telephones are made available concurrently, the same mobile telephones) had been made available on each of those days.
7
The Treasury may by order taking effect from the beginning of any year commencing after the making of the order increase or further increase the amount specified in subsection (2) above.
8
For the purposes of this section—
a
“mobile telephone” means wireless telegraphy apparatus designed or adapted for the purpose of transmitting and receiving spoken messages so as to provide a telephone which is connected to a public telecommunication system (within the meaning of the Telecommunications Act 1984) but which is not physically connected to a land-line and—
i
includes any such apparatus provided in connection with a car, notwithstanding that the car is made available as mentioned in section 157, but
ii
does not include a cordless telephone or a telepoint telephone, whether or not provided in connection with a car;
b
“cordless telephone” means wireless telegraphy apparatus—
i
designed or adapted for the purpose of transmitting and receiving spoken messages so as to provide a wireless extension to a telephone, and
ii
used only as such an extension to a telephone that is physically connected to a land-line;
c
“telepoint telephone” means wireless telegraphy apparatus used for the purpose of a short-range radio communications service utilising frequencies between 864 and 868 megahertz (inclusive);
d
“private use”, in relation to a mobile telephone, means any use of the telephone to make calls, other than calls made wholly, exclusively and necessarily in the performance of the duties of the employment;
e
“full cost”, in relation to any private use of a mobile telephone, means the aggregate of—
i
the cost of any telephone calls which constitute private use of the mobile telephone; and
ii
any other cost of the benefit provided, determined in accordance with the provisions of section 156(2) and (5) to (7) as they would apply if the benefit were chargeable to tax under section 154;
f
an employee who accepts a call on the footing that the cost of the call will be charged to the person providing the benefit shall be treated as if the employee had made the call.
160 Beneficial loan arrangements.
1
M31Where in the case of a person employed in F29employment to which this Chapter applies there is outstanding for the whole or part of a year a loan (whether to the employee himself or a relative of his) of which the benefit is obtained by reason of his employment and—
a
no interest is paid on the loan for that year; or
b
the amount of interest paid on it for the year is less than interest at the official rate,
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 the benefit of the loan for that year.
2
a
there is in any year released or written off the whole or part of a loan (whether to the employee himself or a relative of his, and whether or not such a loan as is mentioned in subsection (1) above), and
b
the benefit of that loan was obtained by reason of his employment,
then there is to be treated as emoluments of the employment, and accordingly chargeable to income tax under Schedule E, an amount equal to that which is released or written off.
F303
Where—
a
there was outstanding, at any time when a person was in employment to which this Chapter applies, the whole or part of a loan to him (or a relative of his) the benefit of which was obtained by reason of his employment, and
b
that employment has terminated or ceased to be employment to which this Chapter applies,
subsection (2) above applies as if the employment had not terminated or, as the case may be, had not ceased to be employment to which this Chapter applies.
4
M33Part I of Schedule 7 has effect as to what is meant by the benefit of a loan obtained by reason of a person’s employment; the cash equivalent of the benefit is to be ascertained in accordance with Part II of that Schedule; and Part III of that Schedule has effect for excluding from the operation of subsection (1) above loans on which interest is eligible for relief under subsection (1) of section 353 or which would be so eligible apart from subsection (2) of that section.
5
M34In this section, sections 161 and 162 and Schedule 7—
a
“loan” includes any form of credit;
b
references to a loan include references to any other loan applied directly or indirectly towards the replacement of the first-mentioned loan;
c
references to making a loan include arranging, guaranteeing or in any way facilitating a loan (related expressions being construed accordingly); and
d
references to the official rate of interest are to the F31rate applicable under section 178 of the Finance Act 1989.
6
For the purposes of this section and section 161, a person is a relative of another person if he or she is—
a
the spouse of that other; or
b
a parent or remoter forebear, child or remoter issue, or brother or sister of that other or of the spouse of that other; or
c
the spouse of a person falling within paragraph (b) above.
7
Subject to section 161, this section applies to loans whether made before or after this Act is passed.
161 Exceptions from section 160.
1
M35There is no charge to tax under section 160(1) if the cash equivalent does not exceed £200 or (for a year in which there are two or more loans outstanding) the total of all the cash equivalents does not exceed that amount.
2
M36Where the amount of interest paid on a loan for the year in which it is made is not less than interest at the official rate applying for that year for the purposes of section 160 and the loan is made—
a
for a fixed and unvariable period; and
b
at a fixed and unvariable rate of interest,
subsection (1) of that section shall not apply to the loan in any subsequent year by reason only of an increase in the official rate since the year in which the loan was made.
3
Where a loan was made at any time before 6th April 1978—
a
for a fixed and unvariable period; and
b
at a fixed and unvariable rate of interest,
section 160(1) shall not apply to the loan if it is shown that the rate of interest is not less than such rate as could have been expected to apply to a loan on the same terms (other than as to the rate of interest) made at that time between persons not connected with each other (within the meaning of section 839) dealing at arm’s length.
4
M37If the employee shows that he derived no benefit from a loan made to a relative of his, section 160(1) and (2) above shall not apply to that loan.
5
Section 160(2) does not apply where the amount released or written off is chargeable to income tax as income of the employee apart from that section, except—
a
where it is chargeable only by virtue of section 148; or
b
to the extent that the amount exceeds the sums previously falling to be treated as the employee’s income under section 677.
6
M38On the employee’s death—
a
a loan within subsection (1) of section 160 ceases to be outstanding for the purposes of the operation of that subsection; and
b
no charge arises under subsection (2) of that section by reference to any release or writing-off which takes effect on or after the death.
7
M39Section 160(2) does not apply to benefits received in pursuance of arrangements made at any time with a view to protecting the holder of shares acquired before 6th April 1976 from a fall in their market value.
F10161A Treatment of qualifying loans.
1
In this Chapter a “qualifying loan" means a loan made to a person where, assuming interest is paid on the loan (whether or not it is in fact paid), the whole or part of the interest paid on it for the year—
a
is eligible for relief under section 353 or would be so eligible but for subsection (2) of that section, or
b
is deductible in computing the amount of the profits to be charged—
i
under Case I or II of Schedule D in respect of a trade, profession or vocation carried on by him, or
ii
under Schedule A in respect of a Schedule A business carried on by him.
2
Section 160(1) does not apply to a loan in any year in which, on the assumption mentioned in subsection (1) above, the whole of the interest paid on it is eligible for relief or deductible as mentioned in that subsection.
F11161B Beneficial loans: loans on ordinary commercial terms.
1
Section 160(1) does not apply to a loan on ordinary commercial terms.
2
Schedule 7A to this Act has effect as to what is meant by a loan on ordinary commercial terms.
162 Employee shareholdings.
1
a
a person employed or about to be employed in F33employment to which this Chapter applies (“the employee”), or a person connected with him, acquires shares in a company (whether the employing company or not); and
b
the shares are acquired at an under-value in pursuance of a right or opportunity available by reason of his employment,
section 160(1) and Schedule 7 apply as if the employee had the benefit of an interest-free loan obtained by reason of his employment (“the notional loan”).
2
The provisions of this section have effect subject to sections 185 and 186; and in this section—
a
M41references to shares being acquired at an under-value are references to shares being acquired either without payment for them at the time or being acquired for an amount then paid which is less than the market value of fully paid up shares of that class (in either case with or without obligation to make payment or further payment at some later time); and
b
M42any reference, in relation to any shares, to the under-value on acquisition is a reference to the market value of fully paid up shares of that class less any payment then made for the shares.
3
M43The amount initially outstanding of the notional loan is so much of the under-value on acquisition as is not chargeable to tax as an emolument of the employee; and—
a
the loan remains outstanding until terminated under subsection (4) below; and
b
payments or further payments made for the shares after the initial acquisition go to reduce the amount outstanding of the notional loan.
4
M44The notional loan terminates on the occurrence of any of the following events—
a
the whole amount of it outstanding is made good by means of payments or further payments made for the shares; or
b
the case being one in which the shares were not at the time of acquisition fully paid up, any outstanding or contingent obligation to pay for them is released, transferred or adjusted so as no longer to bind the employee or any person connected with him; or
c
the shares are so disposed of by surrender or otherwise that neither he nor any such person any longer has a beneficial interest in the shares; or
d
the employee dies.
5
If the notional loan terminates as mentioned in subsection (4)(b) or (c) above, there is then for the year in which the event in question occurs the same charge to income tax on the employee, under section 160(2) F34(and where appropriate section 160(3)), as if an amount equal to the then outstanding amount of the notional loan had been released or written off from a loan within that section.
6
Where after 6th April 1976 shares are acquired, whether or not at an under-value but otherwise as mentioned in subsection (1) above, and—
a
the shares are subsequently disposed of by surrender or otherwise so that neither the employee nor any person connected with him any longer has a beneficial interest in them; and
b
the disposal is for a consideration which exceeds the then market value of the shares,
then for the year in which the disposal is effected the amount of the excess is treated as emoluments of the employee’s employment and accordingly chargeable to income tax under Schedule E.
F357
If at the time of the event giving rise to a charge by virtue of subsection (6) above the employment in question has terminated, that subsection shall apply as if it had not.
8
No charge arises under subsection (6) above by reference to any disposal effected after the death of the employee, whether by his personal representatives or otherwise.
9
This section applies in relation to acquisition and disposal of an interest in shares less than full beneficial ownership (including an interest in the proceeds of sale of part of the shares but not including a share option) as it applies in relation to the acquisition and disposal of shares, subject to the following modifications—
a
for references to the shares acquired there shall be substituted references to the interest in shares acquired;
b
for the reference to the market value of the shares acquired there shall be substituted a reference to the proportion corresponding to the size of the interest of the market value of the shares in which the interest subsists;
c
for the reference to shares of the same class as those acquired there shall be substituted a reference to shares of the same class as those in which the interest subsists; and
d
for the reference to the market value of fully paid up shares of that class there shall be substituted a reference to the proportion of that value corresponding to the size of the interest.
10
In this section—
a
“shares” includes stock and also includes securities as defined in section 254(1);
b
“acquisition” in relation to shares includes receipt by way of allotment or assignment or otherwise howsoever;
c
any reference to payment for shares includes giving any consideration in money or money’s worth or making any subscription, whether in pursuance of a legal liability or not;
d
“market value” has the same meaning as, for the purposes of the 1979 Act, it has by virtue of section 150 of that Act;
and section 839 applies for the purposes of this section.
11
M45This section, in respect of any shares or any interest in shares, operates only to include an amount in emoluments so far as any amount corresponding to it, and representing the same benefit, does not otherwise fall to be so included under the Tax Acts.
163 Expenses connected with living accommodation.
M461
This section applies where, in the case of a person employed in F36employment to which this Chapter applies, living accommodation is provided by reason of the employment and, accordingly, a charge to tax would arise in his case under section 145 but for the case being one of those specified in subsection (4) of that section.
2
Where, by reason of expenditure incurred in one or more of the following, that is to say,—
a
heating, lighting or cleaning the premises concerned;
b
repairs to the premises, their maintenance or decoration;
c
the provision in the premises of furniture or other appurtenances or effects which are normal for domestic occupation;
or by reason of such expenditure being reimbursed to the employee, an amount falls to be included in the emoluments of his employment, that amount shall not exceed the limit specified in subsection (3) below.
3
That limit is—
a
10 per cent. of the net amount of the emoluments of the employment or, if the accommodation is provided for a period of less than a year, so much of that percentage of the net amount as is attributable to the period; less
b
where the expenditure is incurred by a person other than the employee, so much as is properly attributable to the expenditure of any sum made good by the employee to that other.
4
The net amount of the emoluments of a person’s employment for the purposes of subsection (3) above is the amount of those emoluments (leaving out of account the expenditure in question) after—
a
any capital allowance; and
b
any deductions allowable under section 198, 199, 201, 332(3), 592(7), 594 or 619(1)(a);
and, for the purposes of this subsection, in the case of employment by a company there shall be taken into account, as emoluments of the employment, the emoluments of any employment by an associated company.
5
For the purposes of subsection (4) above, a company is an associated company of another if one of them has control of the other or both are under the control of the same person.
164 Director’s tax paid by employer.
1
M47Subject to the provisions of this Chapter, where in any year a person (“the recipient”) is employed as a director of a company and—
a
a payment of, or on account of, income assessable to income tax under Schedule E as emoluments of that employment is made to him in circumstances in which the person making the payment is required, by regulations made under section 203, to deduct an amount of income tax on making the payment; and
b
the whole of that amount is not so deducted but is, or any part of it is, accounted for to the Board by someone other than the recipient;
the amount so accounted for the Board, less so much (if any) as is made good by the recipient to that other person or so deducted, shall be treated as emoluments of the employment and accordingly chargeable to income tax under Schedule E.
2
A person shall not be treated, for the purposes of subsection (1) above, as employed as a director of a company if he has no material interest in the company and either paragraph (a) or paragraph (b) of section 167(5) is satisfied.
3
Where an amount treated as emoluments of a person’s employment, by subsection (1) above, is accounted for to the Board at a time when the employment has come to an end, those emoluments shall be treated, for the purposes of the Income Tax Acts, as having arisen in the year in which the employment ended; but that subsection shall not apply in relation to any amount accounted for to the Board after the death of the director in question.
165 Scholarships.
1
M48Nothing in section 331 shall be construed as conferring on any person other than the person holding the scholarship in question any exemption from the charge to tax under section 154.
2
M49For the purposes of this Chapter, any scholarship provided for a member of a person’s family or household shall, without prejudice to any other provision of this Chapter, be taken to have been provided by reason of that person’s employment if it is provided under arrangements entered into by, or by any person connected with, his employer (whether or not those arrangements require the employer or connected person to contribute directly or indirectly to the cost of providing the scholarship).
3
M50Section 154 does not apply to a benefit consisting in a payment in respect of a scholarship—
a
provided from a trust fund or under a scheme; and
b
held by a person receiving full-time instruction at a university, college, school or other educational establishment; and
c
which would not be regarded, for the purposes of this Chapter, as provided by reason of a person’s employment were subsection (2) above and section 168(3) to be disregarded;
if, in the year in which the payment is made, not more than 25 per cent. of the total amount of the payments made from that fund, or under that scheme, in respect of scholarships held as mentioned in paragraph (b) above is attributable to relevant scholarships.
4
M51This section does not have effect in relation to any payment if—
a
it is made in respect of a scholarship awarded before 15th March 1983, and
b
the first payment in respect of the scholarship was made before 6th April 1984; and
c
in relation to payments made after 5th April 1989, the person holding the scholarship is receiving full-time instruction at the university, college, school or other educational establishment at which he was receiving such instruction on—
i
15th March 1983, in a case where the first payment in respect of the scholarship was made before that date; or
ii
the date on which the first such payment was made, in any other case.
5
M52For the purposes of subsection (4)(c) above, a payment made before 6th April 1989 in respect of any period beginning on or after that date shall be treated as made at the beginning of that period.
6
M53In this section—
a
“scholarship” includes an exhibition, bursary or other similar educational endowment;
b
“relevant scholarship” means a scholarship which is provided by reason of a person’s employment (whether or not that employment is F37employment to which this Chapter applies); and for the purposes of this definition “employment” includes an office or employment whose emoluments do not fall to be assessed under Schedule E but would fall to be so assessed if the employee were resident, and ordinarily resident, and all the duties of the employment were performed wholly, in the United Kingdom;
and section 839 applies for the purposes of this section.
General supplementary provisions
166 Notice of nil liability under this Chapter.
M561
If a person furnishes to the inspector a statement of the cases and circumstances in which payments of a particular character are made, or benefits or facilities of a particular kind are provided, for any employees (whether his own or those of anyone else), and the inspector is satisfied that no additional tax is payable under this Chapter by reference to the payments, benefits or facilities mentioned in the statement, the inspector shall notify the person accordingly; and then nothing in this Chapter applies to those payments, or to the provision of those benefits or facilities, or otherwise for imposing any additional charge to income tax.
2
The inspector may, if in his opinion there is reason to do so, by notice served on the person to whom notification under subsection (1) above was given, revoke the notification, either as from the date of its making or from such later date as may be specified in the notice under this subsection; and then all such income tax becomes chargeable, and all such returns are to be made by that person and by the employees in question as would have been chargeable or would have had to be made in the first instance if the notification under subsection (1) had never been given or, as the case may be, it had ceased to have effect on the specified date.
3
In relation to a notification given before 6th April 1988, the reference in subsection (2) above to income tax includes a reference to income tax chargeable under the corresponding enactments in force before that date, and accordingly, where the notification is revoked for any period before that date, that subsection has effect in relation to years of assessment before the year 1988-89.
4
The validity of any notification given under section 199 of the 1970 Act which was continued in force by paragraph 14 of Schedule 9 to the Finance Act 1976 shall not be affected by the repeal of that paragraph by this Act but shall continue in force as if made under subsection (1) above in relation to tax liability under sections 153 to 156; and subsection (2) above shall apply accordingly.
167F39 Employment to which this Chapter applies.
1
This Chapter applies—
a
to employment as a director of a company (but subject to subsection (5) below), and
b
to employment with emoluments at the rate of £8,500 a year or more.
2
For this purpose emoluments are to be calculated—
a
on the basis that they include all such amounts as come, or would but for section 157(3) come, into charge under this Chapter or section 141, 142, 143 or 145, and
b
without any deduction under section 198, 201 or 332(3).
3
Where a person is employed in two or more employments by the same employer and either—
a
the total of the emoluments of those employments (applying this section) is at the rate of £8,500 a year or more, or
b
this Chapter applies (apart from this subsection) to one or more of those employments,
this Chapter shall apply to all the employments.
4
All employees of a partnership or body over which an individual or another partnership or body has control are to be treated for the purposes of this section (but not for any other purpose) as if the employment were an employment by the individual or by that other partnership or body as the case may be.
5
This Chapter shall not apply to a person’s employment by reason only of its being employment as a director of a company (without prejudice to its application by virtue of subsection (1)(b) or (3) above) if he has no material interest in the company and either—
a
his employment is as a full-time working director; or
b
the company is non-profit-making (meaning that neither does it carry on a trade nor do its functions consist wholly or mainly in the holding of investments or other property) or is established for charitable purposes only.
168 Other interpretative provisions.
M571
The following provisions of this section apply for the interpretation of expressions used in this Chapter.
2
Subject to section 165(6)(b), “employment” means an office or employment the emoluments of which fall to be assessed under Schedule E; and related expressions shall be construed accordingly.
3
For the purposes of this Chapter—
a
all sums paid to an employee by his employer in respect of expenses, and
b
all such provision as is mentioned in this Chapter which is made for an employee, or for members of his family or household, by his employer,
are deemed to be paid to or made for him or them by reason of his employment, except any such payment or provision made by the employer, being an individual, as can be shown to have been made in the normal course of his domestic, family or personal relationships.
4
References to members of a person’s family or household are to his spouse, his sons and daughters and their spouses, his parents and his servants, dependents and guests.
5
As respects cars, the following definitions apply—
a
“car” means any mechanically propelled road vehicle except—
i
a vehicle of a construction primarily suited for the conveyance of goods or burden of any description,
ii
a vehicle of a type not commonly used as a private vehicle and unsuitable to be so used,
iii
a motor cycle as defined in section 190(4) of the M58Road Traffic Act 1972, and
iv
an invalid carriage as defined in section 190(5) of that Act;
b
the age of a car at any time is the interval between the date of its first registration and that time;
c
“business travel” means travelling which a person is necessarily obliged to do in the performance of the duties of his employment;
d
the date of a car’s first registration is the date on which it was first registered—
i
in Great Britain, under the M59Vehicles (Excise) Act 1971 or corresponding earlier legislation; or
ii
elsewhere, under the corresponding legislation of any country or territory;
e
the original market value of a car is the inclusive price which it might reasonably have been expected to fetch if sold in the United Kingdom singly in a retail sale in the open market immediately before the date of its first registration (“inclusive price” meaning the price inclusive of customs or excise duty, of any tax chargeable as if it were a duty of customs, and of value added tax and car tax); and
f
“private use”, in relation to a car made available to any person, or to others being members of his family or household, means any use otherwise than for his business travel.
6
For the purposes of this Chapter—
a
a car made available in any year to an employee, or to others being members of his family or household, by reason of his employment is deemed to be available in that year for his or their private use unless the terms on which the car is made available prohibit such use and no such use is made of the car in that year;
b
a car made available to an employee, or to others being members of his family or household, by his employer is deemed to be made available to him or them by reason of his employment (unless the employer is an individual and it can be shown that the car was made so available in the normal course of his domestic, family or personal relationships).
7
For the purposes of section 156, the market value of an asset at any time is the price which it might reasonably have been expected to fetch on a sale in the open market at that time.
C68
Subject to subsection (9) below, “director” means—
a
in relation to a company whose affairs are managed by a board of directors or similar body, a member of that board or similar body;
b
in relation to a company whose affairs are managed by a single director or similar person, that director or person; and
c
in relation to a company whose affairs are managed by the members themselves, a member of the company,
and includes any person in accordance with whose directions or instructions the directors of the company (as defined above) are accustomed to act.
9
A person is not under subsection (8) above to be deemed to be a person in accordance with whose directions or instructions the directors of the company are accustomed to act by reason only that the directors act on advice given by him in a professional capacity.
10
“Full-time working director” means a director who is required to devote substantially the whole of his time to the service of the company in a managerial or technical capacity.
11
A person shall be treated as having a material interest F40in a company if he, either on his own or with one or more associates, or if any associate of his with or without such other associates,—
a
is the beneficial owner of, or able, directly or through the medium of other companies, or by any other indirect means to control, more than 5 per cent. of the ordinary share capital of the company, or
b
in the case of a close company, possesses, or is entitled to acquire, such rights as would, in the event of the winding-up of the company or in any other circumstances, give an entitlement to receive more than 5 per cent. of the assets which would then be available for distribution among the participators.
In this subsection “associate” has the same meaning as in section 417(3), except that for this purpose “relative” in that subsection has the meaning given by section 160(6) F41and “participator” has the meaning given by section 417(1).
12
“Control”, in relation to a body corporate or partnership, has the meaning given to it by section 840; and the definition of “control” in that section applies (with the necessary modifications) in relation to an unincorporated association as it applies in relation to a body corporate.
13
“Year” means year of assessment (except where the expression is used with reference to the age of a car).
168AF12 Price of a car as regards a year.
1
Subject to the provisions contained in or made under sections 168B to 168G, for the purposes of this Chapter the price of a car as regards a year is—
a
its list price, if it has one, or
b
its notional price, if it has no list price;
and in this section any reference to the relevant car is to the particular car whose price as regards a year is being determined.
2
The relevant car has a list price if a price was published by the car’s manufacturer, importer or distributor (as the case may be) as the inclusive price appropriate for a car of that kind if sold in the United Kingdom singly in a retail sale in the open market on the relevant day.
3
In a case where—
a
subsection (2) above applies, and
b
at the time when the relevant car was first made available to the employee the only qualifying accessories available with it were standard accessories,
the list price of the car is the price published as mentioned in subsection (2) above.
4
In a case where—
a
subsection (2) above applies,
b
at the time when the relevant car was first made available to the employee a qualifying accessory which was an optional accessory was available with it, and
c
in relation to each such accessory then available with the car a price was published by the car’s manufacturer, importer or distributor (as the case may be) as the inclusive price appropriate for an equivalent accessory if sold with a car of the same kind as the relevant car in the United Kingdom singly in a retail sale in the open market on the relevant day,
the list price of the car is the price found under subsection (5) below.
5
The price referred to in subsection (4) above is the total of—
a
the price published as mentioned in subsection (2) above, and
b
the price, or the sum of the prices, published as mentioned in subsection (4) above in relation to the optional accessory or (as the case may be) the optional accessories.
6
In a case where—
a
subsection (2) above applies, and
b
at the time when the relevant car was first made available to the employee a qualifying accessory falling within subsection (7) below was available with the car,
the list price of the car is the price which would have been its list price under subsection (3) or (4) above (as the case may be) if no such accessory had been available with it at that time.
7
An accessory falls within this subsection if—
a
it is an optional accessory, and
b
no price was published by the relevant car’s manufacturer, importer or distributor (as the case may be) as the inclusive price appropriate for an equivalent accessory if sold with a car of the same kind as the relevant car in the United Kingdom singly in a retail sale in the open market on the relevant day.
8
The notional price of a car is the price which might reasonably have been expected to be its list price if its manufacturer, importer or distributor (as the case may be) had published a price as the inclusive price appropriate for an equivalent car if sold in the United Kingdom singly in a retail sale in the open market on the relevant day; and “equivalent car” here means a car—
a
of the same kind as the relevant car, and
b
with accessories equivalent to the qualifying accessories available with the relevant car at the time when it was first made available to the employee.
9
For the purposes of this section—
a
the inclusive price is the price inclusive of any charge for delivery by the manufacturer, importer or distributor to the seller’s place of business and of any relevant tax and, in the case of an accessory, of any charge for fitting it,
b
the relevant day is the day immediately before the date of the relevant car’s first registration,
c
a standard accessory is an accessory equivalent to an accessory which, in arriving at the price published as mentioned in subsection (2) above, is assumed to be available with cars of the same kind as the relevant car, and
d
an optional accessory is an accessory other than a standard accessory;
and “relevant tax” here means any customs or excise duty, any tax chargeable as if it were a duty of customs, any value added tax and any car tax.
10
For the purposes of this section a qualifying accessory is an accessory which—
a
is made available for use with the car without any transfer of the property in it,
b
is made available by reason of the employee’s employment,
c
is attached to the car (whether or not permanently), and
d
is not an accessory necessarily provided for use in the performance of the duties of the employee’s employment.
11
For the purposes of this section “accessory” includes any kind of equipment, but does not include a mobile telephone within the meaning given by section 159A(8)(a).
12
For the purposes of this section the time when a car is first made available to an employee is the earliest time when the car is made available, by reason of his employment and without any transfer of the property in it, either to him or to others being members of his family or household.
F19168AA Equipment to enable disabled person to use car.
1
Equipment falls within this section if it is designed solely for use by a chronically sick or disabled person.
2
Equipment also falls within this section if—
a
at the time when the car is first made available to the employee, the employee holds a disabled person’s badge, and
b
the equipment is made available for use with the car because the equipment enables him to use the car in spite of the disability entitling him to hold the badge.
3
In subsection (2) above “disabled person’s badge” means a badge—
a
b
which is not required to be returned to the issuing authority under or by virtue of the section in question.
4
Subsection (12) of section 168A applies for the purposes of this section as it applies for the purposes of that.
F20168AB Equipment etc. to enable car to run on road fuel gas.
1
Equipment by means of which the car is capable of running on road fuel gas shall not be regarded as an accessory for the purposes of section 168A.
2
Where the car is manufactured in such way as to be capable of running on road fuel gas, the price of the car as regards each relevant year shall be treated as the price given by section 168A, reduced by so much of that price as it is reasonable to attribute to the car’s being manufactured in that way rather than in such a way as to be capable of running only on petrol.
3
In this section “road fuel gas” means any substance which is gaseous at a temperature of 15°C and under a pressure of 1013.25 millibars, and which is for use as fuel in road vehicles.
F13168B Price of a car: accessories not included in list price.
1
This section applies where a car has a list price and in any year there are available with the car qualifying accessories which—
a
fall within section 168A(7), and
b
were available with the car at the time when it was first made available to the employee.
2
As regards that year the price of the car shall be treated as the price found under section 168A, increased by the price of the accessories.
3
For the purposes of this section the price of an accessory is—
a
its list price, if it has one, or
b
its notional price, if it has no list price.
4
The list price of an accessory is the price published by or on behalf of its manufacturer, importer or distributor (as the case may be) as the inclusive price appropriate for such an accessory if sold in the United Kingdom singly in a retail sale in the open market at the relevant time; and the relevant time is the time immediately before the accessory concerned is first made available for use with the car (which may be before the car is first made available to the employee).
5
The notional price of an accessory is the inclusive price which it might reasonably have been expected to fetch if sold in the United Kingdom singly in a retail sale in the open market immediately before it is first made available for use with the car (which may be before the car is first made available to the employee).
6
Where the accessory is permanently attached to the car the sale assumed by subsection (4) or (5) above is one under which the seller is to attach it.
7
For the purposes of this section the inclusive price is the price inclusive of—
a
any charge for delivery by the manufacturer, importer or distributor to the seller’s place of business, and
b
any customs or excise duty, any tax chargeable as if it were a duty of customs and any value added tax.
8
Subsections (10) to (12) of section 168A apply for the purposes of this section as they apply for the purposes of that.
F14168C Price of a car: accessories available after car first made available.
1
This section applies where in any year there are available with a car qualifying accessories which—
a
were not available with the car at the time when it was first made available to the employee, and
b
were not made available with the car before 1st August 1993,
but any accessory whose price is less than £100 shall be ignored for the purposes of this section.
2
As regards that year the price of the car shall be treated as the price found under sections 168A and 168B, increased by the price of the accessories.
3
Subsections (10) to (12) of section 168A apply for the purposes of this section as they apply for the purposes of that.
4
Subsections (3) to (6) of section 168B apply for the purposes of this section as they apply for the purposes of that, but ignoring for the purposes of this section the words “(which may be before the car is first made available to the employee)”.
5
The Treasury may by order substitute for the sum for the time being specified in subsection (1) above a sum of a greater amount; and any such substitution shall have effect as regards such years as are specified in the order.
F15168D Price of a car: capital contributions.
1
This section applies where the employee contributes a capital sum to expenditure on the provision of—
a
the car, or
b
any qualifying accessories which are taken into account under sections 168A to 168C in determining the price of the car as regards a year.
2
As regards each relevant year the price of the car shall be treated as the price found under sections 168A to 168C, reduced by the appropriate amount; and relevant years are the year in which the capital sum is contributed and all subsequent years in which section 157 applies in the case of the car and the employee.
3
As regards a relevant year the appropriate amount is whichever is the smaller of—
a
the amount found under subsection (4) below as regards the year, and
b
£5,000.
4
As regards a relevant year the amount referred to in subsection (3) above is the amount of the capital sum, or the total amount of all the capital sums, which the employee has contributed (whether in the year in question or earlier) to expenditure on the provision of—
a
the car, or
b
any qualifying accessories which are taken into account under sections 168A to 168C in determining the price of the car as regards the year in question.
5
Subsections (10) and (11) of section 168A apply for the purposes of this section as they apply for the purposes of that.
6
The Treasury may by order substitute for the sum for the time being specified in subsection (3)(b) above a sum of a greater amount; and any such substitution shall have effect as regards such years as are specified in the order.
F16168E Price of a car: replacement accessories.
1
The Treasury may make regulations under this section as regards any case where—
a
a qualifying accessory is available with a car in any year, and
b
the accessory (the replacing accessory) replaces another accessory (the replaced accessory).
2
Regulations under this section may provide that as regards the year—
a
the price of the car shall be found as if the replacement had not been made and the replacing accessory were a continuation of the replaced accessory, or
b
sections 168A to 168D shall apply to the car with such modifications to take account of the fact that the replacement has been made as are prescribed by the regulations.
3
The regulations may—
a
provide as mentioned in subsection (2)(a) above as regards some cases and as mentioned in subsection (2)(b) above as regards others;
b
provide under subsection (2)(b) above that sections 168A to 168D shall apply with different modifications in different cases.
F17168F Price of a car: classic cars.
1
This section applies where—
a
the price of a car as regards a year, found under the provisions contained in or made under sections 168A to 168E, is less than the market value of the car for the year,
b
the age of the car at the end of the year is 15 years or more, and
c
the market value of the car for the year is £15,000 or more.
2
In such a case—
a
the price of the car as regards the year is not the amount found under the provisions contained in or made under sections 168A to 168E;
b
the price of the car as regards the year is the market value of the car for the year;
but paragraph (b) above is subject to subsection (5) below.
3
The market value of a car for a year is the price which the car might reasonably have been expected to fetch on a sale in the open market on the material day, on the assumption that any qualifying accessories available with the car on the material day are included in the sale.
4
For the purposes of subsection (3) above the material day is—
a
the last day of the year concerned, or
b
if earlier, the last day in the year on which the car is available to the employee.
5
Where the employee contributes a capital sum to expenditure on the provision of—
a
the car, or
b
any qualifying accessories which are taken into account under subsection (3) above in determining the price of the car as regards a year,
as regards each relevant year the price of the car shall be treated as the market value of the car for the year, reduced by the appropriate amount.
6
For the purposes of subsection (5) above relevant years are the year in which the capital sum is contributed and all subsequent years in which section 157 applies in the case of the car and the employee.
7
For the purposes of subsection (5) above the appropriate amount, in relation to a relevant year, is whichever is the smaller of—
a
the amount found under subsection (8) below as regards the year, and
b
£5,000.
8
As regards a particular year the amount referred to in subsection (7) above is the amount of the capital sum, or the total amounts of all the capital sums, which the employee has contributed (whether in the year or earlier) to expenditure—
a
on the provision of the car, or
b
on the provision of any qualifying accessories which are taken into account in determining the price of the car as regards the year.
9
Subsections (10) and (11) of section 168A apply for the purposes of this section as they apply for the purposes of that.
10
For the purposes of this section the last day in a year on which a car is available to an employee is the last day in the year on which the car is made available, by reason of his employment and without any transfer of the property in it, either to him or to others being members of his family or household.
11
The Treasury may by order—
a
substitute for the sum for the time being specified in subsection (1)(c) above a sum of a greater amount;
b
substitute for the sum for the time being specified in subsection (7)(b) above a sum of a greater amount;
and any such substitution shall have effect as regards such years as are specified in the order.
F18168G Price of a car: cap for expensive car.
1
Where the price of a car as regards a year (as found under the provisions contained in or made under sections 168A to 168F) exceeds £80,000, the price of the car as regards the year is £80,000 and not the price as so found.
2
The Treasury may by order substitute for the sum for the time being specified in subsection (1) above a sum of a greater amount; and any such substitution shall have effect as regards such years as are specified in the order.
Pt. 5 Ch. 2 heading substituted by Finance Act 1989 (c. 26), s. 53(2)(a)