Income Tax (Earnings and Pensions) Act 2003 section 146

Cars that run on road fuel gas

Section 146 provides for a reduction in the list price of a company car when calculating the taxable benefit, where the car has been manufactured to run on road fuel gas.

• This section applies to cars manufactured to run on road fuel gas, but not to bi-fuel cars already covered by separate CO2 emissions rules under section 137
• The car's list price used at step 1 of the benefit-in-kind calculation (under sections 121 or 121B) is reduced to reflect the additional cost of the road fuel gas capability
• The reduction is the amount it is reasonable to attribute to the car being manufactured to run on road fuel gas rather than being capable of running only on petrol
• This adjustment ensures employees are not taxed on the extra manufacturing cost associated with the car's gas-running capability