Income Tax (Earnings and Pensions) Act 2003 section 124A

Automatic car for a disabled employee

Section 124A reduces the taxable benefit charge where a disabled employee is provided with an automatic car because their disability requires them to drive one.

• Where a disabled employee holds a disabled person's badge and must drive an automatic car due to their disability, the car benefit charge may be reduced
• If the automatic car's price exceeds that of an equivalent manual version, the benefit is calculated using the lower manual car price instead
• The equivalent manual car must be the closest non-automatic variant of the same make and model, first registered at around the same time
• A car counts as automatic if the driver has no means of independently changing gear, or if the only means provided do not include a clutch pedal or a manually operated gear lever