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HMRC internal manual

Employment Income Manual

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Car benefit calculation Step 7, car unavailable: reduction in car benefit charge: meaning of unavailable

Section 143(2) 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 illustrates step 7)
  • the introduction to step 7 at EIM25100.

A car is treated as being unavailable on any day if the day:

  • falls before the first day on which the car is available to the employee,
  • falls after the last day on which the car is available to the employee, or
  • falls within a period of 30 days or more throughout which the car is not available to the employee (but note that the days must be consecutive, though they need not all be in the same tax year). For example, a car may be undergoing extensive repairs at a garage for at least 30 consecutive days. If the car is taken to the garage on 31 March and collected again on 1 May, the car will be unavailable for 5 days in the first tax year and 25 in the next.

This definition of unavailable relates solely to the type of period for which a car can be treated as unavailable. It does not attempt to define the underlying circumstances in which a car is either available or not available, which is a separate, although connected, issue. So in considering whether or not there is a period of unavailability that qualifies to reduce the amount of the car benefit charge there are two points to address:

  • is the period itself one that can count as a period of unavailability (remember, any interruption in availability of the car must be at least 30 consecutive days to qualify) and
  • do the facts show that the car was not available to the employee during that period?

The amount of the car benefit charge for that year of assessment will only be reduced if the answer to both questions is yes.

The word available is not defined in the legislation. So we apply its ordinary dictionary meaning of

“capable of being employed with advantage or turned to account; hence, capable of being made use of, at one’s disposal, within one’s reach” (Oxford English Dictionary), see EIM23300.

Note that there is no reduction if the car remains available to the employee, but the employee is not available to the car for some reason (for example, because of an extended time out of the country).

See EIM25170 for examples of circumstances when we would accept that a car is not available.

See EIM25175 for examples of circumstances when we would not accept that a car is not available.