SCHEDULE 6 Taxation of Directors and Others in Respect of Cars

Section 157.

Cash equivalent

1

Subject to paragraphs 2 to 7 below, the cash equivalent of the benefit is 35 per cent. of the price of the car as regards the year.

Reduction for business travel

2

1

Subject to paragraphs 3 to 7 below, where it is shown to the inspector’s satisfaction that the employee was required by the nature of his employment to use, and did use, the car for at least 18,000 miles of business travel in the year concerned, the cash equivalent of the benefit is the amount ascertained under paragraph 1 above, reduced by two thirds.

2

Subject to paragraphs 3 to 7 below, where it is shown to the inspector’s satisfaction that the employee was required by the nature of his employment to use, and did use, the car for at least 2,500 but less than 18,000 miles of business travel in the year concerned, the cash equivalent of the benefit is the amount ascertained under paragraph 1 above, reduced by one third.

3

In relation to a car which for part of the year concerned was unavailable—

a

paragraph 2 above shall have effect as if the figure of 18,000, in each place where it occurs, were reduced by a number which bears to 18,000 the same proportion as the number of days in the year on which the car was unavailable bears to 365;

b

paragraph 2(2) above shall have effect as if the figure of 2,500 were reduced by a number which bears to 2,500 the same proportion as the number of days in the year on which the car was unavailable bears to 365;

but this is subject to paragraph 4(b) below.

4

Where in any year an employee is taxable under section 157 in respect of two or more cars which are available to him concurrently, in relation to each of those cars other than the one which, in the period for which they are concurrently available, is used to the greatest extent for the employee’s business travel—

a

paragraph 2(1) above shall have effect as if for “two thirds” there were substituted “one third”, and

b

paragraph 2(2) above shall not have effect.

Reduction for age of car

5

Subject to paragraphs 6 and 7 below, where at the end of the year concerned the age of the car is 4 years or more, the cash equivalent of the benefit is the amount ascertained under the preceding provisions of this Schedule, reduced by one third.

Reduction for periods when car unavailable

6

Subject to paragraph 7 below, where for any part of the year concerned the car is unavailable, the cash equivalent of the benefit is the amount ascertained under the preceding provisions of this Schedule (“the full amount”) reduced by an amount which bears to the full amount the same proportion as the number of days in the year on which the car is unavailable bears to 365.

Reduction for payments for use of car

7

1

Where in the year concerned the employee is required, as a condition of the car being available for his private use, to pay any amount of money (whether by way of deduction from his emoluments or otherwise) for that use, then—

a

if the amount ascertained under the preceding provisions of this Schedule exceeds the relevant sum, the cash equivalent of the benefit is an amount equal to the excess;

b

if the relevant sum exceeds or is equal to the amount ascertained under the preceding provisions of this Schedule, the cash equivalent of the benefit is nil.

2

In sub-paragraph (1) above—

a

“the relevant sum” means the amount paid by the employee, as there mentioned, in respect of the year concerned;

b

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 others being members of his family or household.

Replacement cars

8

The Treasury may by regulations provide that where—

a

a car is normally available to the employee but for a period of less than 30 days it is not available to him,

b

another car is made available to the employee in order to replace the car mentioned in paragraph (a) above for the whole or part of the period, and

c

such other conditions as may be prescribed by the regulations are fulfilled,

this Schedule shall have effect in relation to the cars concerned subject to such modifications as are prescribed by the regulations.

Meaning of “unavailable”

9

For the purposes of this Schedule a car is to be treated as being unavailable on any day if—

a

the day falls before the first day on which the car is available to the employee,

b

the day falls after the last day on which the car is available to the employee, or

c

the day falls within a period, of 30 days or more, throughout which the car is not available to the employee.

General

10

For the purposes of this Schedule a car is available to an employee at a particular time if it is then 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.