The Income Tax (Replacement Cars) Regulations 1994

• Citation: S.I. 1994/778
• Sections: 6

Section 1 Citation and commencement

These Regulations may be cited as the Income Tax (Replacement Cars) Regulations 1994 and shall come into force on 6th April 1994.

Section 2 Interpretation

In these Regulations unless the context otherwise requires—

“paragraph 8” means paragraph 8 of Schedule 6;

“replaced car” means a car normally available to the employee but which for a period of less than 30 days is not available to him;

“replacement car” means a car made available to the employee in order to replace the replaced car for the whole or part of the period during which the replaced car is not available to the employee;

“Schedule 6” means Schedule 6 to the Taxes Act ;

“the Taxes Act” means the Income and Corporation Taxes Act 1988.

Section 3 Modifications of Schedule 6 introductory

Where the conditions specified in paragraphs (a) and (b) of paragraph 8 and the condition prescribed by regulation 4 below are fulfilled, Schedule 6 shall have effect in relation to the cars concerned subject to the modifications prescribed by regulations 5 and 6 below.

Section 4 Prescribed condition in relation to replacement cars

(1) The prescribed condition is that—

(a) the replacement car is of similar quality to the replaced car, or

(b) the replacement car is not made available to the employee under an arrangement of which the main purpose or one of the main purposes is to provide the employee with the benefit of a car which is materially better than the replaced car.

(2) For the purposes of paragraph (1)(a) above the replacement car is of similar quality to the replaced car if it is neither materially better nor materially worse in quality than the replaced car.

(3) For the purposes of paragraph (1)(b) above the replacement car is materially better than the replaced car if—

(a) it is materially better in quality, or

(b) it has a materially higher price.

(4) For the purposes of paragraph (3)(b) above the price of a car shall be determined in accordance with the provisions contained in sections 168A to 168G of the Taxes Act .

Section 5 Modifications of Schedule 6

Paragraphs 2, 4 and 7 shall each be modified so as to provide in addition that the paragraph shall be applied as if the replacement had not been made and the replacement car were a continuation of the replaced car.

Section 6 Modifications of Schedule 6

Paragraph 9 shall be modified so as to provide in addition that, for the purposes of Schedule 6, the replacement car is also to be treated as unavailable for the period during which it replaces the replaced car.