EIM24055 - Car benefit calculation steps 1 to 4, price of the car: step by step guide
Sections 121 to 124 ITEPA 2003
Before reading the guidance that follows this paragraph, ensure that you are familiar with:
- the method statement in section 121(1) ITEPA 2003, see EIM24015 (this page concerns step 1)
- the general introduction at EIM24050
Steps 1 to 4
The steps are those in the section 121(1) ITEPA 2003 method statement, see EIM24015.
| Step | Stage | Accessories | Car with a list price | Car with no list price |
|---|---|---|---|---|
| Step 1 | Stage 1 | None | Find the list price of the car, see EIM24105 onwards | Find the notional price of the car under section 124, see EIM24150 |
| Step 2 | Stage 1 | Initial extra accessories (type 1) | Add these, whether or not they are available with the car in the tax year in question, see EIM24235 | Nothing to add (these accessories are included in the notional price) |
| Step 2 continued. Note: the price at this stage is normally fixed while the same employee has the car | Stage 2 | Initial extra accessories (type 2) | Add these if they remain available with the car in the tax year in question, see EIM24240 | Nothing to add (these are also included in the notional price) |
| Step 2 continued | Stage 3 | Initial extra accessories (type 3) | Add these if they remain available with the car in the tax year in question, see EIM24245 | Nothing to add (these are also included in the notional price) |
Note: the following steps apply to all cars, whether with a list price or a notional price
| Step | Stage | Accessories | All cars |
|---|---|---|---|
| Step 2 continued | Stage 4 | Later accessories | Add those available in the tax year in question that were not available with the car before 1 August 1993 and have a price of at least £100, Section 126(3) ITEPA 2003, see EIM24250 |
| Step 2 continued | Stage 5 | Replacement accessories | Adjust as required at EIM24255 onwards |
| Step 3 | Stage 1 | None | Deduct allowable capital contributions made in the year in question or earlier, see EIM24350 onwards |
| Step 4 | Stage 1 | None | For years to 2010 to 2011 only, the figure carried forward from step 4 is capped at £80,000, see EIM24440 |
Types of initial extra accessory:
- type one: with a list price published by the manufacturer, distributor or importer of the car
- type two: with a list price published by the manufacturer, distributor or importer of the accessory
- type three: for which a notional price must be used (for example, when there is no list price)
Other points:
- see EIM24175 about cars manufactured to run on road fuel gas
- see EIM24180 regarding the price of an automatic car for use by a disabled person from 2009 to 2010 onwards
- see EIM24275 regarding equipment for disabled persons
- see EIM24280 on the cost of converting a car to run on road fuel gas
- see EIM24400 onwards for the calculation in respect of classic cars