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HMRC internal manual

Employment Income Manual

Car benefit calculation: step 1, price of the car: imported cars

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.

Imported cars

Sometimes the car made available to an employee is one that has been purchased abroad, either in an individual transaction or by a firm that specialises in bringing cars from other countries (frequently other members of the European Community) to the UK for its customers. (A business importer of this type is generally a particular type of car dealer or seller and is quite different to the importer envisaged by section 123(1).)

The fact that a car has been brought to the UK from abroad makes no difference to the approach outlined in EIM24050 and EIM24055 to establishing the price of the car. The legislation is framed in terms of the list price for a car of that kind. Only if there is no list price can any other price (the notional price) be used.

There is nothing in the words of the legislation to suggest that a different approach is to be taken if the car has been bought overseas, whether or not at a lower price.

So the first question to ask about any car bought abroad is whether it’s one for which there is a UK list price.

If there is a UK list price, then that is the price for car benefit purposes wherever the car was bought and if not, see EIM24150.