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HMRC internal manual

Employment Income Manual

From
HM Revenue & Customs
Updated
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Car benefit: meaning of by reason of the employment

Sections 114(1) and 117 ITEPA 2003

For the benefit charge to be triggered the car must be made available by reason of the employment, see Section 114(1)(b).

Car made available by the employer

Section 117 says that a car is regarded as made available by reason of the employee’s employment when:

  • it is made available by the employer to a director or employee, or
  • it is made available by the employer to members of the director’s or employee’s family or household

unless two specific conditions are fulfilled (see EIM23255).

Car made available by someone other than the employer

If a car is not made available by the employee’s employer, it does not mean that it is not made available by reason of the employment. It simply means that Section 117 does not automatically establish this for us by regarding it as being made available by reason of the employee’s employment.

So if a car is made available by someone other than the employer you need to examine all the relevant facts and circumstances to decide whether it has in fact been made available by reason of the employment, see EIM20503.