»Ê¹ÚÌåÓýapp

Section 143 ITEPA 2003

Before reading this example, ensure that you are familiar with:

• the method statement in Section 121(1) ITEPA 2003, see EIM24015 (this page illustrates step 7)
• the guidance on step 7 at EIM25100 onwards.

An employee has a car made available from 6 April 2003 (note that 2003/04 has 366 days). On 3 November 2003 the employee is involved in an accident in which the car is badly damaged. From the date of the accident to 4 December 2003 the car is under repair in a garage. »Ê¹ÚÌåÓýapp employee collects the car on 4 December and retains it for the remainder of the 2003/04 tax year.

In calculating the period for which the car is unavailable, 3 November and 4 December must be excluded as the employee had the car for a part of each day. Accordingly the period to consider is 4 November to 3 December inclusive. This is a period of precisely 30 consecutive days and so it meets the test described in EIM25105. »Ê¹ÚÌåÓýapp car was incapable of being used in that period, and so was unavailable to the employee. So there is a period of unavailability of at least 30 consecutive days and the amount of the car benefit charge must be reduced.

»Ê¹ÚÌåÓýapp figure at step 6 is £3,000.

»Ê¹ÚÌåÓýapp reduction at step 7 for 2003/04 is calculated as follows:

Figure at step 6	£3,000
Unavailable for 30 days: reduction £3,000 x 30/366	£246
Figure at step 7	£2,754