Vehicle Benefits
Chargeable on employees earning £8,500
or over (including benefits), and directors.
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
(for most types of car, this is all the information you need to work out
the taxable benefit)
- your highest rate of income tax.
You can find your taxable percentage
for 2008/09 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 and
below |
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 and
over |
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)
|
|
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% |
|
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.
|
