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HMRC internal manual

Employment Income Manual

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HM Revenue & Customs
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Car benefit: prohibition on other tax charges where car benefit charge applies

Sections 201, 202, 239 and 269 ITEPA 2003

Apart from the provision of car fuel (see EIM25500) or a chauffeur (see EIM23045) the legislation limits the taxable benefit arising from the availability of a car for private use.

When the benefit of a car is charged under Section 120 ITEPA 2003 it is excluded from the residual liability to charge in Part 3 Chapter 10 ITEPA 2003. There is also no residual liability to charge on any benefit in connection with the car other than those listed in the first paragraph on this page. That means that a benefit charge cannot also be made on the provision of, for example, insurance for the car.

But this exemption from residual liability to charge for benefits in connection with the car does not extend to benefits that are also enjoyed by the employee when using a car or van for which that employee is not chargeable to tax, including their own vehicle. For example, the provision of a season ticket for a toll bridge.

There is also legislation forbidding any charge under other employment income provisions in addition to the car benefit charge for:

  • the discharge of any liability of the employee in connection with the car (see EIM00580 onwards)
  • the use of a non-cash voucher or credit-token to obtain goods or services in connection with the car (see EIM16100)
  • the reimbursement by the employer (or other person acting on behalf of the employer) of expenses incurred by the employee in connection with the car (see EIM20601).

So, for example, there would be no charge under the employment income provisions if the employer provided the employee with car wash vouchers for a car that attracts a car benefit charge. See EIM32440 and EIM25255 for details of the tax treatment that applies if the employee incurs car washing expenses that are not met by the employer.

There is no charge to tax for a car telephone, see EIM21780 onwards.

For car parking at or near the employee’s place of employment see EIM21685.

For personalised number plates see EIM24290.