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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 notional price

Section 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 for which a notional price must be determined for the reasons at EIM24220 and in accordance with the conditions at EIM24225. This may be at a time before the car was first made available to the employee. For other accessories see:

  • EIM24235 for an initial extra accessory with a list price published by the manufacturer, distributor or importer of the car
  • EIM24240 for an initial extra accessory with a list price published by the manufacturer, distributor or importer of the accessory
  • 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 notional price as determined under 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 for all years (including part years) in which the accessory is available to the employee with the car.

If the accessory is removed from the car without replacement, the amount is added in full for that year but not for any future year in which the accessory is never available.

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