Section 132 — Income Tax (Earnings and Pensions) Act 2003: Capital contributions by employee

Capital contributions by employee 132 1 This section applies for the purposes of section 121(1) if the employee contributes a capital sum to expenditure on the provision of—

a the car, or b any qualifying accessory which is taken into account in calculating the cash equivalent of the benefit of the car.

2 A deduction is to be made from the amount carried forward from step 2 of section 121(1)—

a for the tax year in which the contribution is made, and b for all subsequent years in which the employee is chargeable to tax in respect of the car by virtue of section 120.

3 The amount of the deduction allowed in any tax year is the lesser of—

a the total of the capital sums contributed by the employee in that year and any earlier years to expenditure on the provision of—

i the car, or ii any qualifying accessory which is taken into account in calculating the cash equivalent of the benefit of the car for the tax year in question, and b £5,000.