Beta This part of GOV.UK is being rebuilt – find out what this means

HMRC internal manual

Employment Income Manual

HM Revenue & Customs
, see all updates

Car benefit calculation Step 2, accessories: qualifying accessory (definitions)

Section 125 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 2)
  • the general introduction to the treatment of accessories at EIM24200.

Definition of accessory, Section 125(2) ITEPA 2003

This includes any kind of equipment, but does not include:

  • equipment necessarily provided for use in the performance of the duties of the employment (see EIM24270)
  • equipment by means of which a car is capable of running on road fuel gas (see EIM24280)
  • equipment to enable a disabled person to use a car (see EIM24275)
  • a mobile telephone (within the meaning given in Section 319(2) ITEPA 2003, see EIM24285).
  • From 6 April 2011 - security enhancements specifically excluded by S235A ITEPA 2003 (see EIM24207)

Note that the second condition does not apply in relation to a type B car, Section 125(3), see EIM24825.

Definition of qualifying accessory, Section 125(1) ITEPA 2003

This means an accessory that:

  • is made available for use with the car without any transfer of the property (see EIM23205) in the accessory
  • is made available by reason of the employment (see EIM20501 onwards) and
  • is attached to the car (whether permanently or not).

The first condition means that you cannot include the price of those accessories that the employee owns, for example where an employee buys a new in-car stereo system for use in the company car.

The third condition: for example, a roof rack (that can be removed from time to time) will be a qualifying accessory if the other conditions are satisfied. Items like car rugs, loose tools or maps that are not attached to the car are not qualifying accessories and so are to be excluded when calculating the price of the car. In practice such items are likely to have a low price.