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HMRC internal manual

Employment Income Manual

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Car benefit calculation Step 1, price of the car: list price: manufacturer, importer or distributor

Section 123 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 
  • the flowchart at EIM24055 
  • when list price is to be used, see EIM24100.

Manufacturer, importer or distributor

There is occasionally some discussion in the technical and popular press about whether the price advertised by a car dealer can be used instead of the price published by the car’s manufacturer, importer or distributor.

Do not accept that:

  • a car dealer can be regarded as a distributor, or
  • an importer other than the single authorised importer can be regarded as an importer

for the purposes of this legislation.

Such an interpretation could result in multiple price lists for each car, published by everyone involved right from its original manufacture to its final sale. There is nothing within the structure or language of the legislation to warrant that interpretation. It contains no provision for choosing between different prices for the same type of car, as there is only a single list price for each car. To find that single list price the legislation starts with the manufacturer. It is only in the absence of a list price published by the manufacturer that we need to turn to the importer or finally to the distributor.

This was made clear in Explanatory Note 452 when the Bill that became ITEPA 2003 was before Parliament.