Income Tax (Earnings and Pensions) Act 2003 section 148

Reduction of cash equivalent where car is shared

Section 148 deals with the reduction of the taxable car benefit charge when a company car is shared between two or more employees of the same employer who each have private use of the vehicle at the same time.

• When the same employer makes a car available concurrently for the private use of two or more employees who are each taxable on the car benefit, the taxable amount must be calculated separately for each employee
• Each employee's car benefit charge is reduced on a just and reasonable basis to reflect the fact that the car is shared, rather than each employee being taxed on the full amount
• The reduction applies whether the employee is taxed under the standard car benefit rules or under the rules for optional remuneration arrangements (such as salary sacrifice schemes)
• Private use of the car by a member of an employee's family or household counts as private use by the employee for the purposes of this sharing reduction