Income Tax (Earnings and Pensions) Act 2003 section 147

Classic cars: 15 years of age or more

Section 147 deals with how the taxable car benefit is calculated differently when the car provided to an employee is a classic or older vehicle with a high market value.

• The special rules apply when a car is at least 15 years old at the tax year end, has a market value of £15,000 or more, and that market value exceeds the figure produced by the standard car benefit calculation
• Where these conditions are met, the market value of the car replaces the figure from the standard calculation, meaning the benefit is based on what the car could actually sell for on the open market
• Market value is determined as the open market price on the last day of the tax year (or the last day the car was available to the employee, if earlier), including any qualifying accessories
• If the employee has made capital contributions towards the car or its qualifying accessories, these reduce the market value used in the calculation, but the total deduction is capped at £5,000 in any tax year