Commentary on Sections Example 3 £150(Pe) – £50(E) = £100 Section 159: Deduction for payments for private use
615.This section provides for adjustment of the value calculated under section 157 of this Act for payments made by the employee for private use of a van. The section derives from paragraph 3(1), (2) and (3) of Schedule 6A to ICTA.
616.Subsection (1) states when the section applies. That is when, as a condition of the van being made available for private use, the employee is required to pay for, and does pay for, that use. The words “(whether by way of deduction from earnings or otherwise)” avoid any doubt about whether a deduction from earnings can amount to a payment. The same approach is used in sections 144(1)(a) and 165(1)(a) of this Act.
617.Subsections (2) and (3) provide for the deduction of the appropriate amount at Step 4 of the calculation in section 157.
618.Subsection (4) specifies that for cases where the van is shared for part of the tax year, the deduction relates to the period(s) when it is not shared.
619.Subsection (5) extends the section to private use of a van by a member of the employee’s family or household.