Commentary on Sections Example 3 £150(Pe) – £50(E) = £100 Section 144: Deduction for payments for private use
549.This section provides for a deduction to be made in calculating the cash equivalent at Step 8  of section 121(1) of this Act, to take account of the employee having paid for private use of the car. The section derives from paragraph 7 of Schedule 6 to ICTA.
550.Subsection (1) states when the section applies. That is when, as a condition of the car being made available for private use, the employee is required to pay, and does pay, for that private use.
551.The words “(whether by way of deduction from earnings or otherwise)” have been retained as they remove a potential area of doubt about whether a deduction from earnings can amount to a payment. The same approach is used in sections 159(1)(a) and 165(1)(a) of this Act.
552.Subsections (2) and (3) provide for the deduction of the appropriate amount at Step 8 of the calculation in section 121(1).
553.Subsection (4) extends the section to private use of a car by a member of the employee’s family or household.
554.Subsection (5) makes this section subject to a further provision that applies if the car is temporarily replaced.