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My client, a director of a close company, is proposing to contribute £5,000 towards the cost of a company car which is to be made available to him on the understanding that all except for £100 of this will be refunded to him when the car is eventually sold or part exchanged. This would seem to satisfy the requirements in step 3 of the method of calculating the cash equivalent of the benefit of the car as provided for in ITEPA 2003, s 121.
My client a director of a close company is proposing to contribute £5 000 towards the cost of a company car which is to be made available to him on the understanding that all except for £100 of this will be refunded to him when the car is eventually sold or part exchanged. This would seem to satisfy the requirements in step 3 of the method of calculating the cash equivalent of the benefit of the car as provided for in ITEPA 2003 s 121. In fact in the Employment Income Manual at ElM23193 HMRC have gone on record as indicating that in a situation where the same proportion of the proceeds from the eventual sale of the car is refunded as represented by the contribution as a proportion of original cost this does not prevent the deduction provided for in step 3.
Please reach out to customer services at +44 (0) 330 161 1234 or 'customer.services@lexisnexis.co.uk' for further assistance.
