Income Tax (Earnings and Pensions) Act 2003 section 119

Where alternative to benefit of low emission car or van offered

Section 119 deals with the tax treatment where an employee is offered an alternative to the benefit of a low emission car, ensuring that merely offering such an alternative does not create an earnings charge.

• Applies when a car is made available to an employee and the car's CO2 emissions do not exceed 75 grams per kilometre
• The employee must also be offered an alternative to the benefit of the car for the section to apply
• Simply offering an alternative (such as a cash allowance) does not cause the car benefit to be treated as taxable earnings under the general earnings rules
• The car benefit remains taxable under the specific company car benefit-in-kind rules rather than being reclassified as earnings