Vehicle Benefits

Chargeable on employees earning Ł8,500 or over (including benefits), and directors.

Car Benefit
Car Fuel Benefits
Company Vans

Car Benefit

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

You can find the appropriate percentage for 2009/10 using the following table:

CO₂ emissions (g/km)	Appropriate percentage
CO₂ emissions (g/km)	Petrol %	Diesel %
120 and below	10	13
121 - 139	15	18
140 - 144	16	19
145 - 149	17	20
150 - 154	18	21
155 - 159	19	22
160 - 164	20	23
165 - 169	21	24
170 - 174	22	25
175 - 179	23	26
180 - 184	24	27
185 - 189	25	28
190 - 194	26	29
195 - 199	27	30
200 - 204	28	31
205 - 209	29	32
210 - 214	30	33
215 - 219	31	34
220 - 224	32	35
225 - 229	33	35
230 - 234	34	35
235 and above	35	35

How to find out how much CO₂ your company car emits – see:

the car’s V5 registration document
your dealer
the data pages of car magazines (current models)

the Vehicle Certification Agency – www.vca.gov.uk
the website of the Society of Motor Manufacturers and Traders - www.smmt.co.uk/co2/co2search.cfm

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.

Fuel-Only Mileage Rates
HMRC advisory mileage rates at the time of the Budget for employee private mileage reimbursement or employer reimbursement of business mileage in company cars are:
	Petrol	Diesel	LPG
Up to 1400cc	10p	11p	7p
1401cc - 2000cc	12p	11p	9p
Over 2000cc	17p	14p	12p

The taxable car fuel benefit, for 2009/10, is calculated by multiplying Ł16,900 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 Ł18,000. 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: Ł18,000 x 23% x 40% = Ł1,656

If the employer provides any fuel used for private journeys and is not reimbursed for the cost, the 2009/10 tax bill for the fuel is: Ł16,900 x 23% x 40% = Ł1,554.80.

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.