EIM23255 - Car benefit: meaning of by reason of the employment: car made available by the employer

Sections 114(1) and 117 ITEPA 2003

As a consequence of the statutory provision described at EIM23250, a car made available by an employer to someone who is an employee or a member of the employee바카라 사이트™s family or household is automatically regarded as made available by reason of that employee바카라 사이트™s employment (employee includes director for this purpose; for the meaning of members of a person바카라 사이트™s family or household see EIM20504).

Note that this still applies if the family member also works for the same employer. There is nothing in Section 117 to exclude a family member who is an employee of the same employer.

Exception

The legislation provides one exception to this. This is where:

  • the employer is an individual and
  • it can be shown that the car was made available to the employee in the normal course of the employer바카라 사이트™s ordinary domestic, family or personal relationship with the employee concerned.

For example, an individual sole trader who employs a son or daughter might provide that child with a car to be used for private purposes purely in his or her capacity as a parent.

Facts in support of a claim that a car had been so provided would be that the car had not been treated as a business asset and that no expense or capital allowance relating to the car had been allowed as deductions in computing the parent바카라 사이트™s taxable profits.

So it is sensible to liaise with the Inspector who deals with the business accounts of the sole trader before accepting a claim of this sort.

See also EIM23550 where:

  • the family member to whom a car is made available is personally liable to a benefit charge in respect of it (for example, because he or she is also a director of the same company), or
  • the family member to whom the car is made available is not themselves liable to a benefit charge in respect of the car, but the conditions in Section 169 ITEPA 2003 are satisfied (see EIM23550).