Income Tax (Earnings and Pensions) Act 2003 section 131

Replacement accessories

Section 131 sets out the rules for calculating the taxable car benefit when a car accessory is replaced with another accessory of the same kind.

• Where a replacement accessory is not superior to the original, the taxable benefit is calculated as though no replacement occurred and the new accessory is simply a continuation of the old one.
• Where a replacement accessory is superior and the old accessory was non-standard and both would otherwise feature in the benefit calculation, the old accessory is effectively removed from the calculation and only the new accessory is taken into account.
• A new accessory is considered superior if its price exceeds both the original price of the old accessory and the current price of an equivalent accessory at the time immediately before the new one becomes available.
• The price of an accessory means its list price where one exists, or otherwise its notional (estimated market) price.