Income Tax (Earnings and Pensions) Act 2003 section 219

Extra amounts to be added in connection with a car

Section 219 explains how additional amounts relating to company cars are calculated when determining an employee's total taxable benefits under the living accommodation benefit rules (Step 2 of section 218).

• Where a car is provided by reason of employment, extra amounts must be added to the accommodation benefit calculation.
• The first extra amount is the higher of the car and fuel benefit cash equivalents, or the amount that would be taxable if the employee had been offered a cash alternative instead of the car.
• The second extra amount covers benefits connected with the car that would normally be taxable under the expenses or mileage allowance rules but for specific statutory exemptions.
• The general £75,000 threshold used in the accommodation benefit calculation is disregarded when computing these extra car-related amounts.