Income Tax (Earnings and Pensions) Act 2003 section 239

Payments and benefits connected with taxable cars and vans and exempt heavy goods vehicles

Section 239 provides exemptions from income tax for payments, discharged liabilities, and other benefits connected with taxable company cars and vans, or exempt heavy goods vehicles, ensuring that the car or van benefit charge covers most vehicle-related expenses without additional tax arising.

• No income tax arises when an employer discharges a liability or reimburses expenses an employee incurs in connection with a taxable car or van, or an exempt heavy goods vehicle.
• These exemptions do not override the separate income tax charges on car fuel, van fuel, or benefits provided under optional remuneration arrangements.
• No additional tax charge arises under the residual benefits-in-kind rules for benefits connected with these vehicles, except where a driver is provided for the employee.
• A heavy goods vehicle is "exempt" if it qualifies under the modest private use exemption in section 238, and this extends to lower-paid ministers of religion who would otherwise qualify.