Section 132A | Capital contributions by employee: optional remuneration arrangements ^F1

From legislation.gov.uk

15 July 2026

(1)This section applies for the purposes of section 121A(1) if the employee contributes a capital sum to expenditure on the provision of—^F1

(a)the car, or^F1

(b)any qualifying accessory which is taken into account in calculating under section 121B the modified cash equivalent of the benefit of the car.^F1

(2)A deduction is to be made from the amount carried forward from step 1 of section 121A(1)—^F1

(a)for the tax year in which the contribution is made, and^F1

(b)for all subsequent tax years in which the employee is chargeable to tax in respect of the car by virtue of section 120A.^F1

(3)The amount of the deduction allowed in any tax year is found by—^F2F1

(a)first multiplying the capped amount by the appropriate percentage, and^F1F2

(b)then multiplying the result by the availability factor.^F1F2

(4)In subsection (3) the reference to “the appropriate percentage” is to the appropriate percentage for the car for the tax year (determined in accordance with sections 133 to 142).^F1

(4A)For the purposes of subsection (3), “the availability factor” is given by the formula—^F1F3

Formula

\frac{Y - U}{Y}

where—

Y is the number of days in the tax year, and

U is the number of days in the tax year on which the car is unavailable.

(4B)For the purposes of subsection (4A), the car is unavailable on any day if the day—^F1F3

(a)falls before the first day on which the car is available to the employee,^F1F3

(b)falls after the last day on which the car is available to the employee, or^F1F3

(c)falls within a period of 30 days or more throughout which the car is not available to the employee.^F1F3

(5)In this section “the capped amount” means the lesser of—^F1

(a)the total of the capital sums contributed by the employee in that year and any earlier years to expenditure on the provision of—^F1

(i)the car, or^F1

(ii)any qualifying accessory which is taken into account in calculating under section 121B the modified cash equivalent of the benefit of the car for the tax year in question, and^F1

(b)£5,000.^F1

(6)This section is modified by section 147A (classic cars: optional remuneration arrangements).^F1