CA23510 - PMA: Cars: Outline: meaning of car and qualifying hire car
CAA01/S81 & S82
WDAs on most cars are restricted to an annual amount of
£3,000. The allowances on the car have to be calculated
separately so that the restriction can be applied. This is done by
putting the expenditure on the car into a separate pool
CA23520. Where a person makes a
contribution towards the cost of a car, the £3,000 limit is
divided between the person making the contribution and the
recipient CA23520. There is anti-avoidance legislation that stops a
person creating a balancing allowance by selling a car to a
connected person for a nominal amount
CA23540.
For PMA purposes a
car is a mechanically propelled vehicle except a
vehicle:
- constructed in such a way that it is primarily suited for transporting goods of any sort, or
- of a type which is not commonly used as a private vehicle and is not suitable for use as a private vehicle.
Treat a car that is capable of being used as a private vehicle
as a car for PMA purposes no matter how the taxpayer actually uses
it (Roberts v Granada TV Rental Ltd 46TC295).
Do not treat the following vehicles as cars for PMA
purposes:
- a car that it is illegal for a taxpayer to use as a private vehicle even if the taxpayer sometimes uses it as a private vehicle (Gurney v Richards 62TC87);
- cars used by a driving school and fitted with dual control mechanisms (Bourne v Auto School of Motoring (Norwich) Ltd 42TC217);
- emergency vehicles. A vehicle equipped with a fixed blue flashing light on the roof which can only be used on the road by a fire officer or police officer is an emergency vehicle.
There is guidance on number plates at
CA21250.
The cars legislation does not apply to qualifying hire cars.
A
qualifying hire car is a car that is provided
wholly or mainly for hire to, or the carriage of, members of the
public in the ordinary course of a trade, and satisfies one of
these three conditions:
1, It is not normally hired to, or used for the carriage of, the same person for:
- 30 or more consecutive days, or
- 90 or more days in total in any 12-month period.
Treat connected persons as the same person when you apply this test.
Example A car that is hired to Johnny from 10 February to 8 March, his daughter, Roseanne, from 1 April to 27 April, Johnny from 5 May to 31 May and Roseanne again from 1 September to 25 September is not a qualifying hire car. Johnny and Roseanne are connected and between them they have had the car on hire for more than 90 days in a 12-month period.
2, It is provided for hire to a person who uses it in such a way that the conditions in 1 are satisfied. Cars that are hired to a limited range of customers, such as employees of persons connected with the owner do not satisfy this condition.
3, It is a car provided for the disabled. A car provided for the disabled is a car provided wholly or mainly for use by people receiving certain types of disability living allowance or a mobility supplement. In more detail, the cars that are in this category are cars provided wholly or mainly for people receiving:
- a disability allowance under the Social Security Contributions and Benefits Act 1992 or its Northern Ireland equivalent because of entitlement to the mobility supplement;
- a War Pensions mobility supplement; or
- a mobility supplement.
