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HMRC internal manual

Employment Income Manual

HM Revenue & Customs
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Car benefit calculation Step 2, accessories: conditions when determining list or notional price (part 1)

Sections 128 to 130 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.

Price of the accessory

The price of an accessory is always to be ascertained as the published list price if it has one, or the notional price if it does not (see EIM24220). Either way, the price is the inclusive price if sold under the following four conditions:

  • in the United Kingdom
  • singly
  • in a retail sale and
  • in the open market.

There is always a fifth condition, but this varies with the type of accessory. Details of the fifth condition are in EIM24230. That page should be read as one with this page.

Inclusive price means the price inclusive of:

  • any charge for delivery by the manufacturer, importer or distributor to the seller’s place of business,
  • any relevant taxes (other than car tax, i.e. any VAT, any customs or excise duty and any tax chargeable as if it were a customs duty), and:

    • if the accessory has a list price published by the manufacturer, importer or distributor of the car (see EIM24220), any charge for fitting the accessory, or
    • for any other accessory permanently attached to the car, the price the seller would charge for attaching it.

For an accessory with a list price published by the manufacturer, distributor or importer of the car, the price is the inclusive price for an equivalent accessory if sold with a car of the same kind.