Car benefit calculation Step 2, accessories: personalised car number plates
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.
Under the arrangements for taxing company cars, the number plate itself (that is the piece of metal or plastic with the numbers and letters upon it) is a qualifying accessory. This means it must be included in the price of the car for tax purposes.
But if the car is later re-registered and so needs replacement number plates, the rules about later accessories (see EIM24250) or replacement accessories (see EIM24255) may apply. If the latter, it is clear that a personalised number plate is unlikely to be superior in itself to the plate it replaced, so it will be disregarded at step 2.
It is not superior in itself because most of the value in personalised or cherished number plates lies in the intangible right to use a particular registration mark. This right is separate from the price of the plate itself.
The value of that right is not to be included in the list price or notional price of the car made available to the employee.
You should also note that the provision of a personalised number plate on a company car will not give rise to a taxable benefit over and above the car benefit charge. This is because of a prohibition on tax charges on other benefits arising in connection with the car, as outlined at EIM23035. The benefit of a personalised number plate is within this prohibition because it is a benefit in connection with the car.
These comments apply only where an employer, or somebody acting on the employer’s behalf, pays for a personalised number plate for a car to which a car benefit charge applies. There is no bar to assessing a benefit if the employer pays for the re-registration of the employee’s own car.