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HMRC internal manual

Employment Income Manual

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HM Revenue & Customs
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Car benefit calculation Step 2, accessories: initial extra accessory with list price quoted by manufacturer, etc. of the car

Sections 126(1)(a) 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 
  • the definition of initial extra accessory at EIM24215 (note that the accessory must be available with the car at the time when it is first made available to the employee, (otherwise it is a later accessory).

Accessories dealt with on this page

The accessories dealt with on this page are initial extra accessories with a list price published by the manufacturer, distributor or importer of the car. For other accessories see:

  • EIM24240 for an initial extra accessory with a list price published by the manufacturer, distributor or importer of the accessory
  • EIM24245 for an initial extra accessory with a notional price
  • EIM24250 for a later accessory.

Amount to be added at step 2 of Section 121(1) ITEPA 2003

The amount to be added is the list price published by the manufacturer, distributor or importer of the car as the inclusive price for an equivalent accessory if sold with a car of the same kind under the conditions in EIM24225. This may not be the amount paid for it.

Years for which the amount is to be added

The amount is to be added in full for all years (including part years) in which the car is available to the employee, even if the accessory is not available for all or part of a particular year because it has been removed from the car; see Section 126(2)(c) ITEPA 2003.

If the accessory is replaced, see the special rules at EIM24255 onwards.