Commentary on Sections Example 3 £150(Pe) – £50(E) = £100 Section 121: Method of calculating the cash equivalent of the benefit of a car
446.This section states how to calculate the cash equivalent of the car benefit. The section derives from sections 157(2) and 168G(1) and paragraph 1 of Schedule 6 to ICTA.
447.Subsection (1) sets out the steps involved in the calculation by using a method statement.
448.Subsection (2) gives signposts to two special cases when the calculation is modified.
449.Subsection (3) gives a signpost to the reduction that may be made when employees share a car.