Income Tax (Earnings and Pensions) Act 2003 section 247

Provision of cars for disabled employees

Section 247 provides an income tax exemption for disabled employees who are provided with a car by their employer, provided certain conditions about the car and its use are met.

• No income tax arises on the benefit of a car provided to a disabled employee, including fuel and related expenses, if three conditions are all satisfied.
• The car must be specially adapted for the employee's disability, or, where the employee can only drive an automatic due to their disability, it must be an automatic car (Condition A).
• The terms of the car's provision must restrict its use to business travel, ordinary commuting (or journeys substantially equivalent to commuting), or travel to exempt training locations (Condition B).
• The car must actually be used only in accordance with those restricted terms throughout the tax year (Condition C).