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HMRC internal manual

Employment Income Manual

Car benefit: meaning of unsuitable for use as a private vehicle

Section 115(1) ITEPA 2003

The guidance on this page explains how to apply the third stage of the test outlined at EIM23125, that is whether that type of vehicle is one that is unsuitable for use as a private vehicle.

Remember that the whole of the test at EIM23125 has to be satisfied in order for a vehicle to fall outside the definition of “car”. It follows that a vehicle that is of a type not commonly used as a private vehicle will still count as a car unless:

  • it is also unsuitable for use as a private vehicle, or
  • it falls in one of the other excluded categories in EIM23100.

The words unsuitable for use as a private vehicle should be taken to mean unsuitable for use by members of the public generally. So, with regard to any vehicle under consideration, the key question to pose is; what are the features of this vehicle that make it unsuitable to be used privately?

One example of a feature that will make a vehicle unsuitable to be used privately is the fact that it is of a type that ordinary members of the public are legally barred from driving, see EIM23140.

If a vehicle is not a ‘car’ for this reason, you should consider whether the benefit can be taxed under the residual benefits legislation, starting at Section 201 ITEPA 2003.