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HMRC internal manual

Employment Income Manual

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Car benefit calculation Step 2, accessories: initial extra accessory, later accessory (definitions)

Section 126 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.

Initial extra accessory

This means a qualifying accessory that:

  • is a non-standard accessory (see EIM24210)
  • is available with the car at the time when it is first made available to the employee and
  • if it is an accessory in relation to which there is no published price of the manufacturer, importer or distributor of the car (see EIM24235), is available with the car in the tax year in question.

The third condition means that there is no reduction in the price of the car if a standard accessory is removed and not replaced. If it is replaced, see the guidance on replacement accessories at EIM24255.

Later accessory

This means a qualifying accessory that:

  • is available with the car in the tax year in question
  • was not available with the car at the time when it was first made available to the employee
  • was not made available with the car before 1st August 1993 and
  • has a price of at least £100.

Note that sets of accessories cannot be split up for this purpose. A set of alloy wheels with a price of £300 must be added at step 2; they cannot be treated as four separate wheels, each priced at £75.

Why is there more than one type of non-standard accessory?

They are treated in different ways under step 2 of Section 121(1) in arriving at the figure to be carried forward from step 2, see the summary at EIM24200.