Vehicle Benefits

Chargeable on employees earning £8,500 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 (‘zero emission cars’ including those powered solely by electricity), 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 2012/13 using the following table:

CO₂ emissions (g/km)	Appropriate percentage
CO₂ emissions (g/km)	Petrol %	Diesel %
Zero	0	0
Up to 75	5	8
76 to 99	10	13
100 – 104	11	14
105 – 109	12	15
110 – 114	13	16
115 – 119	14	17
120 – 124	15	18
125 – 129	16	19
130 – 134	17	20
135 – 139	18	21
140 – 144	19	22
145 – 149	20	23
150 – 154	21	24
155 – 159	22	25
160 – 164	23	26
165 – 169	24	27
170 – 174	25	28
175 – 179	26	29
180 – 184	27	30
185 – 189	28	31
190 – 194	29	32
195 – 199	30	33
200 – 204	31	34
205 – 209	32	35
210 – 214	33	35
215 – 219	34	35
220 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

The taxable car fuel benefit, for 2012/13, is calculated by multiplying £20,200 by the same percentage as applies (or would apply) for the car benefit.

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 September 2012 for employee private mileage reimbursement or employer reimbursement of business mileage in company cars are:
Engine Size	Petrol	LPG
1400cc or less	15p	10p
1401cc – 2000cc	18p	12p
Over 2000cc	26p	17p

Engine Size	Diesel
1600cc or less	12p
1601cc – 2000cc	15p
Over 2000cc	18p

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 2012/13 tax bill on the car is: £21,000 x 26% x 40% = £2,184.

If the employer provides any fuel used for private journeys and is not reimbursed for the cost, the 2012/13 tax bill for the fuel is: £20,200 x 26% x 40% = £2,100.80.

Company vans

The taxable benefit for the unrestricted use of company vans is £3,000 (with no reduction for older vans) plus a further £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	£414	£75.90	£489.90

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.