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HMRC internal manual

Employment Income Manual

Car benefit calculation Step 2, accessories: replacement accessories: new accessory not superior to old

Section 131 ITEPA 2003

Before reading the guidance that follows this paragraph, ensure that you are familiar with the basic rules concerning replacement accessories at EIM24255.

New accessory not superior to old accessory

These rules only apply if the new accessory if of the same kind as the old, see EIM24255.

In these circumstances, the amount to be included at step 2 of Section 121(1) ITEPA 2003 is determined as though the replacement had not been made and the new accessory is a continuation of the old accessory.

This is so whether the old accessory was a standard accessory (dealt with at step 1 of Section 121(1)), an initial extra accessory or a later accessory (step 2 of Section 121(1)).

In practice most accessories are replaced on a like for like basis when a fault occurs or damage is repaired. Most such replacements are not superior and so have no effect on the price of the car.

Effect of Section 131 ITEPA 2003

  • If the old accessory was a standard accessory there is nothing to add at step 2.
  • if the old accessory was a non-standard accessory then add the price of the old accessory at step 2.
  • Ignore the new accessory entirely. It is treated as a continuation of the old accessory and therefore loses its independent existence.

New accessory superior to old accessory

See EIM24265.