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HMRC internal manual

Employment Income Manual

From
HM Revenue & Customs
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Car benefit: meaning of car

Section 115(1) ITEPA 2003

A car is a mechanically propelled road vehicle that is not:

  • a goods vehicle (a vehicle of a construction primarily suited for the conveyance of goods or burden of any description).

    • This will include most commercial vehicles such as lorries, pick-up trucks or vans. Estate cars will usually count as cars unless they have been permanently and substantially modified to change their construction to one primarily suited for the conveyance of goods or burden (see EIM23115 onwards). There is guidance on multi-purpose vehicles at EIM23145 and double cab pick-ups at EIM23150.
    • Note that the test is of construction, not use.
    • A vehicle that escapes from being a car for car benefit purposes by this route will be treated as a van (see EIM22700 for years from 2005/06 onwards and EIM22050 onwards for years to 2004/05) unless it is large enough to be a heavy goods vehicle (see EIM22300 onwards).
  • a vehicle of a type not commonly used as a private vehicle and unsuitable to be so used.

    • This will obviously apply to a specialised vehicle, such as a bus. But it may also include outwardly conventional vehicles that have been modified in some way. Further guidance on this point is at EIM23125 onwards.
    • The benefit of the use of a vehicle that escapes from being a car for car benefit purposes by this route will be taxed under the general benefit rules on use of an asset (see EIM21615 onwards).
  • a motor cycle as defined in Section 185(1) of the Road Traffic Act 1988
  • an invalid carriage as defined in Section 185(1) of the Road Traffic Act 1988.

The flowchart at EIM23105 explains how different vehicles are dealt with under various Sections of ITEPA 2003.

EIM23110 is designed to be issued to taxpayers wanting guidance on the difference between cars and vans for tax purposes.