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HMRC internal manual

Employment Income Manual

Car benefit calculation Step 2, accessories: replacement accessories: general

Section 131 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 replacement accessory rules apply when:

  • a later accessory is available with the car in the tax year in question
  • that accessory (the new accessory) replaced another qualifying accessory (the old accessory) in that year or an earlier tax year and
  • the new accessory is of the same kind as the old accessory.

Meaning of same kind

Kind depends on function: a radio/cassette player and a radio/CD player are not of the same kind because their function is different, whereas alloy wheels are of the same kind as steel wheels because their function is the same.

Meaning of superior

A new accessory is superior to an old accessory if the price of the new accessory exceeds whichever is the greater of:

  • the price of the old accessory, or
  • the price of an accessory equivalent to the old accessory at the time immediately before the new accessory is first made available for use with the car.

The price of an accessory means:

  • its list price, if it has one, or
  • its notional price, if it has no list price.

Further guidance

  • New accessory not superior to old, see EIM24260.
  • New accessory superior to old, see EIM24265.