Income Tax (Earnings and Pensions) Act 2003 section 165

Deduction for payments for private use

Section 165 allows a reduction in the taxable benefit charge on a shared van where the employee makes payments towards the cost of private use.

• If an employee is required to pay, and actually does pay, for private use of a shared van, a deduction is made from the benefit charge calculated under section 161 or section 164.
• Payments can be made by any means, including deductions from the employee's earnings — both count equally as valid payments.
• The calculation of the deduction follows specific rules set out in subsections (2) to (4), and where a single global payment covers private use of more than one van, the deduction must be apportioned appropriately.
• Private use by a member of the employee's family or household is treated in the same way as private use by the employee themselves.