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 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 2017/18 using the following table:
| CO2 emissions (g/km) |
Appropriate percentage | |
|---|---|---|
| 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 at http://carfueldata.direct.gov.uk/search-new-or-used-cars.aspx.
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 benefit
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 March 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 | 22p | 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 177 g/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 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) | £646.00 | £122.00 | £768.00 |
| Tax (40% taxpayer) | £1,292.00 | £244.00 | £1,536.00 |
| Tax (45% taxpayer) | £1,453.50 | £274.50 | £1,728.00 |
| 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 is no fuel benefit for such vans.