Section 121B | Meaning of “modified cash equivalent” ^F1

(1)The “modified cash equivalent” of the benefit of a car for a tax year is calculated in accordance with the following steps (which must be read with subsections (2) to (4))—^F1

Step 1 Find the price of the car in accordance with sections 122 to 124A.

Step 2 Add the price of any accessories which fall to be taken into account in accordance with sections 125 to 131.The resulting amount is the interim sum.

Step 3 Find the appropriate percentage for the car for the year in accordance with sections 133 to 142.

Step 4 Multiply the interim sum by the appropriate percentage for the car for the year.

Step 5 Make any deduction under section 143 for any periods when the car was unavailable.The resulting amount is the modified cash equivalent of the benefit of the car for the year.

(2)Where the car is shared the modified cash equivalent is calculated under this section in accordance with section 148.^F1

(3)The modified cash equivalent of the benefit of a car for a tax year is to be taken to be zero if the condition in subsection (4) is met.^F1

(4)The condition is that the benefit of the car for the tax year would be exempt from income tax but for section 228A (exclusion of certain exemptions).^F1

(5)The method of calculation set out in subsection (1) is modified in the special cases dealt with in—^F1

(a)section 146 (cars that run on road fuel gas), and^F1

(b)section 147A (classic cars: optional remuneration arrangements).^F1