Tax Rates 2009/10
Introduction
Income Tax
Capital Gains Tax
Corporation tax
Main Capital Allowances
VAT
Inheritance Tax
Vehicle Benefits
Mileage Allowances
NI Contributions
Key Dates and Deadlines
Pension Premiums
Charitable Giving
Savings & Investment
Some Useful Rates
Stamp Taxes

Vehicle Benefits

Chargeable on employees earning £8,500 or over (including benefits), and directors.

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
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)

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 £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 reimbursed for the cost, the 2009/10 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.