Section 121 | Method of calculating the cash equivalent of the benefit of a car

(1)The cash equivalent of the benefit of a car for a tax year is calculated as follows—Step 1Find the price of the car in accordance with sections 122 to 124A.Step 2Add the price of any accessories which fall to be taken into account in accordance with sections 125 to 131.Step 3Make any deduction under section 132 for capital contributions made by the employee to the cost of the car or accessories. The resulting amount is the interim sum. Step 4...Step 5Find the appropriate percentage for the car for the year in accordance with sections 133 to 142.Step 6Multiply the interim sum by the appropriate percentage for the car for the year.Step 7Make any deduction under section 143 for any periods when the car was unavailable.The resulting amount is the provisional sum.Step 8Make any deduction from the provisional sum under section 144 in respect of payments by the employee for the private use of the car.The result is the cash equivalent of the benefit of the car for the year.^F1F2

(2)The method of calculation set out in subsection (1) is modified in the special cases dealt with in—

(3)Where the car is shared the cash equivalent is calculated under this section in accordance with section 148.^F3