SE23100 - Car benefits: price of the car as regards the year - general

Paragraph 1 Schedule 6 ICTA 1988 and section 168(5)(e) ICTA 1988

The starting point for the calculation of the cash equivalent of a car benefit is the "price of the car as regards the year" (paragraph 1 Schedule 6 ICTA 1988).

This is determined in accordance with the provisions of Section 168A ICTA 1988 to Section 168G ICTA 1988.

The "price of the car as regards a year" will usually be based on list price, adjusted as necessary for accessories (see SE23101 onwards) and capital contributions (seeSE23160 onwards).

It is possible for the price of the car to change from one year to the next, depending on whether additional accessories are added in the later year. It is for that reason the term "the price of the car as regards a year" is used in the legislation.

Different rules apply if:

• the car has no list price (see SE23140)
• the car is a "classic car" (see SE23170 onwards)
• the car is a road fuel gas car (see SE23107 onwards)

We are concerned with calculating the cash equivalent of the car benefit charge for the "relevant car" - that is for the particular car which is made available for private use by reason of the employment.

The flowchart at SE23100a is a summary of how to calculate the price of the car as regards the year. Note that the "price of the car as regards a year" is not the price actually paid by the person providing the car.

Examples of the calculation of the price of a car are at example SE23185 onwards.