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.

For cars which cannot produce CO2 engine emissions under any circumstances when driven, the appropriate percentage is reduced to 0%, thereby reducing the car benefit charge to nil.

For cars emitting between 1 and 75g/km the appropriate percentage is reduced to 5% for 5 years from 6 April 2010.

You can find the appropriate percentage for 2010/11 using the following table:

CO₂ emissions (g/km)	Appropriate percentage
CO₂ emissions (g/km)	Petrol %	Diesel %
1 - 75	5	8
76 - 120	10	13
121 - 134	15	18
135 - 139	16	19
140 - 144	17	20
145 - 149	18	21
150 - 154	19	22
155 - 159	20	23
160 - 164	21	24
165 - 169	22	25
170 - 174	23	26
175 - 179	24	27
180 - 184	25	28
185 - 189	26	29
190 - 194	27	30
195 - 199	28	31
200 - 204	29	32
205 - 209	30	33
210 - 214	31	34
215 - 219	32	35
220 - 224	33	35
225 - 229	34	35
230 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	11p	11p	7p
1401cc - 2000cc	14p	11p	8p
Over 2000cc	20p	14p	12p

The taxable car fuel benefit, for 2010/11, is calculated by multiplying Ł18,000 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 Ł21,000. It runs on petrol, and emits 177 g/km of CO₂.

If we assume the driver pays tax at 40%, the 2010/11 tax bill on the car is: Ł21,000 x 24% x 40% = Ł2,016

If the employer provides any fuel used for private journeys and is not reimbursed for the cost, the 2010/11 tax bill for the fuel is: Ł18,000 x 24% x 40% = Ł1,728.

Company vans

The taxable benefit for the unrestricted use of company vans is £3,000 (with no reduction for older vans) plus a further £550 of taxable benefit if fuel is provided by the employer for private travel.

Van and fuel charge	Van	Fuel	Total
Tax (20% taxpayer)	£600	£110	£710
Tax (40% taxpayer)	£1,200	£220	£1,420
Tax (50% taxpayer)	£1,500	£275	£1,775
Employer's class 1A NICs	£384	£70.40	£454.40

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 £3,000 is reduced to nil for vans which cannot produce C0₂ engine emissions under any circumstances when driven. There will be no fuel benefit for such vans.