"Replacement" cars

[phtpb]

Hello

I've been looking through the Exp + Ben guide (480) and on the revenue website, but cannot find an explicit answer to this question.

Mr X is in Company Car A, which breaks down and is taken in for servicing. Mr X is given replacement hire Car B in the interim. After a couple of weeks, it turns out that Car A is a write off, and Mr X is given Company Car C. He only had Car B for two weeks (less than the 30 day limit), however as he didn't go back into Car A, does it still count as a replacement car, or do we record the two weeks in Car B on P11D?

Thank you!
Tom

[Ian Congreave]

This situation is specifically covered in the tax legislation. If a temporary car is provided while the principal car is unavailable for a period of less than 30 days, there are technically two cars available to the employee. However, as long as the replacement car is not "materially better" than the normal car, i.e. not materially better in quality or in taxable value, the employee is not treated as having two cars. There is no requirement in this situation for the temporary car to be reported and the normal car should be treated as being still available to the employee up to the date that the new car is made available.

HMRC guidance is on page 31 of the 480 booklet.