Income Tax (Earnings and Pensions) Act 2003 section 138

Car with a CO2 emissions figure: automatic car for a disabled employee

Section 138 provides a special rule to reduce the car benefit charge for disabled employees who must drive an automatic car, by substituting the lower CO2 emissions figure of an equivalent manual car.

• Where a disabled employee (holding a disabled person's badge) must drive an automatic car because of their disability, the CO2 emissions figure may be reduced for benefit-in-kind purposes.
• If the automatic car's CO2 emissions figure exceeds that of an equivalent manual version, the lower manual figure is used instead to calculate the taxable benefit.
• An "equivalent manual car" is the closest available manual-transmission variant of the same make and model, first registered at or about the same time as the automatic car.
• A car counts as "automatic" if the driver has no clutch pedal or manually operated gear lever to change the gear ratio independently of the accelerator and brakes.