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Vehicle Benefits (Company Cars)

Chargeable on employees earning £8,500 or over (including benefits), and directors.


Car Benefit

The tax you pay on your company car is governed by four factors:

  • the list price of the car, on the day before it was first registered, plus certain accessories,
  • the rate at which the car emits carbon dioxide (CO2),
  • the fuel type
  • your highest rate of income tax.

(for most types of car, this is all the information you need to work out the taxable benefit)

You can find your taxable percentage from 1st May 2008 using the following table:


CO2 in
g/km

Taxable %

CO2 in
g/km

Taxable %

CO2 in
g/km

Taxable %

Petrol

Diesel

Petrol

Diesel

Petrol

Diesel

120 & less

10%

13%

 

 

 

 

 

 

121 to 139

15%

18%

170 to 174

22%

25%

205 to 209

29%

32%

140 to 144

16%

19%

175 to 179

23%

26%

210 to 214

30%

33%

145 to 149

17%

20%

180 to 184

24%

27%

215 to 219

31%

34%

150 to 154

18%

21%

185 to 189

25%

28%

220 to 224

32%

35%

155 to 159

19%

22%

190 to 194

26%

29%

225 to 229

33%

35%

160 to 164

20%

23%

195 to 199

27%

30%

230 to 234

34%

35%

165 to 169

21%

24%

200 to 204

28%

31%

235 & over

35%

35%


Find out what your car CO2 emissions are: Click Here

 

Reliable emissions data is not widely available for cars registered before 1 January 1998. For them, the following taxable percentages apply, regardless of fuel type:


Engine capacity

Taxable %

Up to 1400cc

15%

1401 - 2000cc

22%

Over 2000cc

32%


Car fuel benefits


If the employee pays for the full cost of all fuel for private journeys (usually including home to work) there will be no car fuel benefit. In all other cases the full tax charge will be due.  The taxable car fuel benefit, for 2008/09, is calculated by multiplying £16,900 by the same percentage as applies (or would apply) for the car benefit.   Example: A company car driver has a car which, on the day before it was first registered, had a list price of £18,000. It runs on petrol, and emits 177 g/km of CO2.   If we assume the driver pays tax at 40%, the annual tax bill on the car is: £18,000 x 23% x 40% = £1,656.  If the employer provides any fuel used for private journeys and is not re-imbursed for the cost, the 2008/09 tax bill for the fuel is: £16,900 x 23% x 40% = £1,554.80.

 

Company vans


The taxable benefit for the unrestricted use of company vans is £3,000 (with no reduction for older vans) plus a further £500 of taxable benefit if fuel is provided by the employer for private travel.

 

Van and fuel charge

Van

Fuel

Total

Tax (20% taxpayer)

£600

£100

£700

Tax (40% taxpayer)

£1,200

£200

£1,400

Employer's class 1A NICs

£384

£64

£448


Van drivers can avoid a benefit charge if they agree not to use the van for personal journeys. Driving to and from work is acceptable so long as there is a reasonable amount of business use.

 

Green Cars


For details of tax implications of Green Cars


D G East Partnership

Corbins  Angley Rd, Cranbrook, Kent TN17 2PL

01580 715550