SE23312 - Car benefits: cars held simultaneously 1994/95 to 1998/99 - example
Paragraph 4 Schedule 6 ICTA
This example illustrates the points covered at
SE23305.
Two cars are made available to the same employee concurrently
during 1998/99
- Car A has a list price of £15,000 (no accessories) and the employee uses it for 12,000 miles of business travel in 1998/99.
- Car B has a list price of £20,000 (no accessories) and the employee uses it for 4,000 miles of business travel in 1998/99.
Both cars are under 4 years old and were available for the whole
tax year.
Stage 1 – Identify the “first” car (
SE23305)
This is the car used to the greatest extent for the
employee’s business travel, and must therefore be car A.
Stage 2 – Calculate the car benefit of car A
| Using table at SE23305 we find that with 12,000 miles of business travel, car A qualifies for a reduction in the basic car benefit of one third |
|
| £15,000 x 35% | £5,250 |
| Less one third reduction | (£1,750) |
| Car benefit charge | £3,500 |
Stage 3 – Calculate the car benefit of car B.
| Using table at SE23305 we find that with 4,000 miles of business travel, car B does not qualify for any reduction in the basic car benefit |
|
| £20,000 x 35% | £7,000 |
| Total car benefit charge for the two cars is therefore £3,500 + £7,000 | £10,500 |
