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Vehicle Benefits

Chargeable on directors and employees.

Car Benefit

The taxable benefit is calculated as a percentage of the list price of the car, on the day before it was registered, plus certain accessories. The percentage depends upon the rate at which the car emits carbon dioxide (CO2), and the fuel type.

You can find the appropriate percentage for 2017/18 using the following table.

CO2 emissions
Appropriate percentage
(g/km)
Petrol
%
Diesel
%
0 - 50
9
12
51 - 75
13
16
76 - 94
17
20
95 - 99
18
21
100 - 104
19
22
105 - 109
20
23
110 - 114
21
24

115 - 119

22
25
120 - 124
23
26
125 - 129
24
27
130 - 134
25
28
135 - 139
26
29
140 - 144
27
30
145 - 149
28
31
150 - 154
29
32
155 - 159
30
33
160 - 164
31
34
165 - 169
32
35
170 - 174
33
36
175 - 179
34
37
180 - 184
35
185 - 189
36
190 and above
37

 

CO2 emission information

For cars registered from March 2001, the definitive CO2 figure used to calculate company car tax will be that shown on the car's V5 (Registration Document). The Vehicle Certification Agency (VCA) supplies CO2 (and other emissions) data. Information on CO2 emissions for both new (unregistered) and used (registered) cars can be found here.

Cars registered before 1 January 1998

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

The taxable car fuel benefit, for 2017/18, is calculated by applying the CO2 based car benefit percentage to the car fuel benefit charge multiplier of £22,600.

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.

Fuel-Only Mileage Rates
HMRC advisory mileage rates from 1 December 2017 for employee private mileage reimbursement or employer reimbursement of business mileage in company cars are:
Engine Size
Petrol
LPG
1400cc or less
11p
7p
1401cc - 2000cc
14p
9p
Over 2000cc
21p
14p
     
Engine Size
Diesel
 
1600cc or less
9p
 
1601cc - 2000cc
11p
 
Over 2000cc
13p
 

Example: A company car driver has a car which, on the day before it was first registered, had a list price of £21,000. It runs on petrol, and emits 177g/km of CO2.

If we assume the driver pays tax at 40%, the 2017/18 tax bill on the car is: £21,000 x 34% x 40% = £2,856.

If the employer provides any fuel used for private journeys and is not reimbursed for the cost, the 2017/18 tax bill for the fuel is: £22,600 x 34% x 40% = £3,073.60.

Company vans

The taxable benefit for the unrestricted use of company vans is £3,230 (with no reduction for older vans) plus a further £610 of taxable benefit if fuel is provided by the employer for private travel.

Van and fuel charge
Van
Fuel
Total
Tax (20% taxpayer)
£646
£122
£768
Tax (40% taxpayer)
£1,292
£244
£1,536
Tax (45% taxpayer)
£1,453.50
£274.50
£1,728
Employer's Class 1A NICs
£445.74
£84.18
£529.92

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.

The flat rate of £3,230 is reduced by 80% to £646 for vans which cannot produce C02 engine emissions under any circumstances when driven. There will be no fuel benefit for such vans.