Section 120A — Income Tax (Earnings and Pensions) Act 2003: Benefit of car treated as earnings: optional remuneration arrangements

Benefit of car treated as earnings: optional remuneration arrangements 120A 1 Where this Chapter applies to a car in relation to a particular tax year and the conditions in subsection (3) are met—

a the relevant amount (see section 121A) is to be treated as earnings from the employment for that tax year, and b section 120(1) does not apply.

2 In such a case (including a case where the relevant amount is nil) the employee is referred to in this Chapter as being chargeable to tax in respect of the car in the tax year.

3 The conditions are that—

a the car is made available to the employee or member of the employee's household pursuant to optional remuneration arrangements, b the total foregone amount in connection with the car for the tax year is is greater than the modified cash equivalent of the benefit of the car for the tax year (see section 121B),

and c the car's CO 2 emissions figure (see sections 133 to 138) exceeds 75 grams per kilometre.

4 In this section, and in section 121A, the total foregone amount in connection with the car for a tax year is the total of—

a the amount foregone (see section 69B) with respect to the benefit of the car for that year, and b the amount foregone (see section 69B) with respect to each other benefit that—

i is connected with the car, ii is provided in that year for the employee, or a member of the employee's household, pursuant to optional remuneration arrangements, and iii is neither the provision of a driver nor the provision of fuel.