Part 3Employment income: earnings and benefits etc. treated as earnings
Chapter 6Taxable benefits: cars, vans and related benefits
Cars: capital contributions by employee
132Capital contributions by employee
1
This section applies if the employee contributes a capital sum to expenditure on the provision of—
a
the car, or
b
any qualifying accessory which is taken into account in calculating the cash equivalent of the benefit of the car.
2
A deduction is to be made from the amount carried forward from step 2 of section 121(1)—
a
for the tax year in which the contribution is made, and
b
for all subsequent years in which the employee is chargeable to tax in respect of the car by virtue of section 120.
3
The amount of the deduction allowed in any tax year is the lesser of—
a
the total of the capital sums contributed by the employee in that year and any earlier years to expenditure on the provision of—
i
the car, or
ii
any qualifying accessory which is taken into account in calculating the cash equivalent of the benefit of the car for the tax year in question, and
b
£5,000.