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HMRC internal manual

Employment Income Manual

Car benefit calculation Step 7, car unavailable: circumstances when car is not unavailable: example

Section 143 ITEPA 2003

Before reading this example, ensure that you are familiar with:

  • the guidance on step 7 at EIM25100 onwards and
  • in particular, the meaning of unavailable, see EIM25105.

The car does not count as being unavailable to the employee simply because the employee is:

  • banned from driving, or
  • out of the country on business or holiday, or
  • unable to drive the car for some other reason, for example illness.

In some of these circumstances it may be the case that the employee is unavailable to drive the car. But that is not the same as the car being unavailable to the employee, which is what the legislation requires. So, unless there is any other evidence that the car is unavailable (see below) the benefit charge continues to apply without reduction.

Neither does the car count as unavailable simply because there is no current:

  • road tax
  • MOT certificate, or
  • car insurance.

However, if one of the above situations results in the car actually being withdrawn from the employee, so that the employee has no power of access to the car, then the car benefit charge can be reduced provided that the period in question lasts at least 30 consecutive days if the employee has the car both before and after the interruption in availability, see EIM25105.