SE23530 - Car benefits: calculation of car benefit charge; reduction for payments for private use of the car

Paragraph 7 Schedule 6 ICTA 1988

Payments that an employee makes for the private use of the car reduce the car benefit charge, after taking account of business mileage, the age of the car and periods of unavailability. In other words, any adjustment for such payments is the final stage in the calculation of the car benefit charge. To qualify for reduction

• there must be a requirement in the year to make payments as a condition of the car being available for private use, and
• the payments must be for that private use.

If the amount paid for the private use of the car equals or exceeds the cash equivalent calculated under the above provisions then the car benefit charge is nil. Otherwise the amount of the benefit charge is the excess over and above the amount paid in respect of that year. (See example SE23545 and example SE23546)

See SE23531 on payments for specific supplies or services, such as car insurance.