# The Income Tax (Replacement Cars) Regulations 1994, Regulation 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.

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Source: https://www.legislation.gov.uk/uksi/1994/778/regulation/4 (the official version)
Page: https://openlegislation.uk/income-tax-replacement-cars-regulations-1994/regulation-4
Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.