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HMRC internal manual

Employment Income Manual

HM Revenue & Customs
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Car benefit: special cases: demonstration and courtesy cars (from 2009/10): when is there a car benefit charge?

EIM23800 provides the background to this page.

HMRC accepts that a car can be a tool of the trade for the car salesman and servicing staff but has always held the view that this is not a sufficient reason for introducing special arrangements where private use is allowed.

There is one, very minor exception. Where, as part of the normal duties, a director, car salesperson or demonstrator takes a car home for the express purpose of calling on a prospective customer, or servicing staff take a car home overnight as part of a collection and delivery arrangement with a customer, the car will not on that account alone be treated as available for private use. In essence, the whole journey is for a genuine business purpose.

If, however, such a car is otherwise available for the employee’s private use, for example on journeys home when no such call is scheduled, at weekends or for holidays, the appropriate car benefit will be chargeable.

The fact that an employee might occasionally take home a car under arrangements which fall within this exception will not cause any reduction in the car benefit to which they would otherwise be liable.

2008/09 and earlier years

This guidance applies only for 2009/10 and later years. Local arrangements applied for years to 2008/09 as described at EIM23750 onwards.