SE23040 - Car benefits: vehicles of a type not commonly used as a private vehicle and unsuitable to be so used - meaning of "type"
Section 168(5)(a)(ii) ICTA 1988
SE23020 sets out the four exceptions from being a car which are prescribed in the legislation. This guidance expands on the second of those exceptions, namely that a vehicle will not count as a car for car benefit purposes if it is
- a vehicles of a type not commonly used as a private vehicle, and
- unsuitable to be so used.
There are three stages to applying this test.
- Identify what is the “type” of vehicle – see below.
- Consider whether that type of vehicle is one that is not commonly used as a private vehicle - see SE23041.
- Consider whether that type of vehicle is one that is unsuitable for use as a private vehicle - see SE23042
Meaning of “type” of vehicle
What counts as a “type” of vehicle for tax purposes
was considered in the capital allowance cases of Bourne v Auto
School of Motoring (Norwich) Limited 42TC217 and Roberts v Granada
TV Rental Limited 46TC295. Those cases show that a vehicle that has
been modified in some way can be a different “type”
from one which has not been modified. It does not matter that they
are both of the same basic model. In the Granada TV case the Judge
said “there may be many different categories, with a vehicle
moving from one to the other with comparatively small
modifications”.
Modifications that can be accepted as establishing a
different “type” include
- the addition of fixed flashing blue lights (see Gurney v Richards - 62TC287 and SE23043.), or
- the fitting of dual controls (see Bourne v Auto School of Motoring (Norwich) Limited – (42TC217)), or
- the addition of a rooftop sign or loud speaker.
However, even if a vehicle has been modified so that it is of a different “type,” it will not necessarily follow that the vehicle is not a car. You still need to consider whether that “type” is
- not commonly used as a private vehicle ( SE23041), and
- unsuitable to be used as a private vehicle ( SE23042)
The fact that a vehicle has been painted in a particular way (for example, to include an advertisement for the employer's products) should not be accepted as establishing a “type”.
