Tax breaks for security enhanced cars | AccountingWEB

Tax breaks for security enhanced cars


Individuals who, because of the nature of their employment, need a security enhanced company car will benefit from the abolition of an £80,000 cap on the cash equivalent of the benefit. 

As part of reforms to the company car tax regime designed to incentivise purchases of the lowest emitting vehicles, the  Government announced at Budget 2009 that the  cap  on the cash equivalent of the benefit of a company car would be removed with effect from 6 April 2011. The calculation of the cash equivalent of the taxable benefit where a company car is made available for private use is based on the list price and cost of any accessories provided as well as CO2 engine emissions. Following removal of the cap, including the cost of certain security enhancements could make the taxable benefit disproportionately expensive.

The relief will be confined to those individuals who can demonstrate that the nature of their employment creates a threat to their personal security.   

Currently Part 3 of the Income Tax (Earnings and Pensions) Act 2003 sets out the types of earnings and benefits received by employees which are treated as taxable earnings under the benefit in kind rules. Chapter 6 of Part 3 covers the treatment of cars, vans and related benefits.

The new measure will be introduced in amendments to ITEPA 2003 in the Finance Bill 2012.

Security enhancements will be added to the four categories of excluded accessory set out in section 125.  Enhancements that will be added include:

  • armour designed to protect the car's occupants from explosions or gunfire
  • bullet-resistant glass
  • any modifications to the car's fuel tank designed to protect the tank's contents from
  • explosions or gunfire (including by making the tank self-sealing); and,
  • any modification made to the car in consequence of anything which is a relevant security feature by virtue of the proceeding three examples.

Does anyone in this group have dealings with the kinds of people who might be affected?


This may be relevant to us

NewACA | | Permalink

A client of ours has numerous cars and 4x4s. They are a security firm, with trade in places like Afghanistan, Iraq, West Africa etc. Generally, they transport "high risk" westerners in dangerous places. Many cars cost between £100-200k because of security enhancements for bullet-proof protection and explosions, when the vehicles would otherwise cost £40k.


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