SE23160 - Car benefits: reduction of the price of the car as regards a year because of capital contributions

Section 168D(1) - (2) ICTA 1988

If the employee contributes a capital sum, or capital sums, to expenditure on the provision of

• the car, or
• any qualifying accessories which have been taken into account in determining the price of the car as regards a year,

then, subject to certain conditions, the price of the car is reduced by the amount of the contribution. See example SE23336, example SE23185 and example SE23186.

Note: this provision applies to contributions of capital sums 'to expenditure on the provision of the car or qualifying accessories'. That means you would expect to see the payment made at or about the time when the car or accessory in question is provided. If there is no agreement governing the terms of the contribution then other evidence of a payment by the employee should be sought. Cases of difficulty should be submitted to Employment Income Technical.