SE23187 - Car benefits: calculation of price as regards a year; notional price - example

Section 168A ICTA 1988

These examples illustrate the principles outlined at SE23104. They are not meant to cover all possible scenarios, and other methods may be appropriate, depending on the particular facts and circumstances.

Left hand drive version of car for which there is a UK list price for the right hand drive version

Assume the car in question is made by an overseas manufacturer called Twingo.

We would need to look at the position where a single UK retail customer approaches a UK Twingo dealer seeking a Twingo Auto left-hand drive. It is likely that the overseas Twingo factory where the car is manufactured will be making cars of otherwise identical specification for both left-hand and right-hand drive markets. Therefore, presumably the UK dealer and importer will simply need to arrange for a left-hand drive model to be included in a batch of cars for export to the UK.

It is therefore likely that, assuming the rest of the specification is identical, the list price for a left-hand drive model would not be significantly different from that for a right-hand drive model. Although of course there might be a premium on the price to reflect the additional trouble taken to export the left-hand drive car to an unusual market.

Accordingly, we would expect the notional price of a left-hand drive car for which there is a right-hand drive version with a UK list price, to be either the same as or higher than the UK list price.

This of course assumes that the specifications and qualifying accessories available with the cars are identical.

Car for which there is no UK right hand drive version

The approach will vary according to the circumstances, and it is therefore impossible to prescribe a single approach.

Consider the following scenario:

• the car in question is a Twingo 1.8 Super Injection which is marketed in the country of manufacture, but not in the UK.
• there is also a Twingo 1.8 Basic which is marketed in the UK as well as in the country of manufacture.

One approach in this case is:

• Look at the percentage price differential between the Basic and the Super Injection versions in the country of manufacture
• Apply a similar uplift to the UK list price of the Basic version in order to arrive at a sensible approximation of the UK list price of the higher specification version.

Another approach would be to look generally at the list prices in the country of manufacture and the UK for Twingo cars which are marketed in both countries, in order to see if there is an identifiable trend in the relationship between the overseas and UK list prices (e.g. UK list price is normally the sterling equivalent of the overseas list price plus x%).