Part 3Employment income: earnings and benefits etc. treated as earnings
Chapter 6Taxable benefits: cars, vans and related benefits
Cars: benefit treated as earnings
F1121AOptional remuneration arrangements: method of calculating relevant amount
(1)
To find the relevant amount for the purposes of section 120A, take the following steps—
F2Step 1 Take the total foregone amount in connection with the car for the tax year (see section 120A(4)). .
Step 2 Make any deduction under section 132A in respect of capital contributions made by the employee to the cost of the car or accessories.
The resulting amount is the provisional sum.
Step 3 Make any deduction from the provisional sum under section 144 in respect of payments by the employee for the private use of the car.
The result is the “relevant amount” for the purposes of section 120A.
(2)
Where it is necessary, for the purpose of determining the F3“total foregone amount” for the purposes of step 1 of subsection (1), to apportion an amount of earnings to F4a benefit mentioned in section 120A(4)(a) or (b) for the tax year, the apportionment is to be made on a just and reasonable basis.
In this subsection “earnings” is to be interpreted in accordance with section 69B(5).