Income Tax (Earnings and Pensions) Act 2003 section Schedule 7 paragraphs 22-24

Taxable benefits: cars, vans and related benefits

Section Schedule 7 paragraphs 22–24 provide transitional rules for how employee capital contributions made before 6 April 2003 towards company cars (including classic cars) are treated under the new ITEPA 2003 rules, ensuring they continue to be recognised in line with the earlier ICTA provisions.

• Where an employee made a capital contribution towards a company car before 6 April 2003, the rules in section 132 on reducing the car benefit charge still apply, but with modifications that refer back to the old ICTA method of determining the car's price rather than the new ITEPA cash equivalent calculation.
• The reduction for such pre-April 2003 contributions is spread across the tax years following the year in which the contribution was made, rather than simply applying to "subsequent" years as stated in the standard ITEPA wording.
• A similar transitional approach applies to classic cars (those 15 years of age or more) under section 147, where pre-April 2003 capital contributions are recognised using the old ICTA method for determining the car's price rather than the ITEPA market value approach.
• Paragraph 24 was repealed by the Finance Act 2004, so it no longer has any effect.