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, 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 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 £18,000 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 £21,000. 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: £21,000 x 24% x 40% = £2,016

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: £18,000 x 24% x 40% = £1,728.

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.