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% (8% for diesel) for 5 years from 6 April 2010.

You can find the appropriate percentage for 2013/14 using the following table:

CO2 emissions
Appropriate percentage
(g/km)
Petrol
%
Diesel
%
Zero
0
0
Up to 75
5
8
76 - 94
10
13
95 - 99
11
14
100 - 104
12
15
105 - 109
13
16
110 - 114
14
17
115 - 119
15
18
120 - 124
16
19
125 - 129
17
20
130 - 134
18
21
135 - 139
19
22
140 - 144
20
23
145 - 149
21
24
150 - 154
22
25
155 - 159
23
26
160 - 164
24
27
165 - 169
25
28
170 - 174
26
29
175 - 179
27
30
180 - 184
28
31
185 - 189
29
32
190 - 194
30
33
195 - 199
31
34
200 - 204
32
35
205 - 209
33
35
210 - 214
34
35
215 - 219
35
35
220 - 224
35
35
225 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

The taxable car fuel benefit, for 2013/14, is calculated by applying the CO2 based car benefit percentage to the car fuel benefit charge multiplier of £21,100.

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 2013 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
11p
Over 2000cc
26p
16p
     
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 2013/14 tax bill on the car is: £21,000 x 27% x 40% = £2,268.

If the employer provides any fuel used for private journeys and is not reimbursed for the cost, the 2013/14 tax bill for the fuel is: £21,100 x 27% x 40% = £2,279.

Company vans

The taxable benefit for the unrestricted use of company vans is £3,000 (with no reduction for older vans) plus a further £564 of taxable benefit if fuel is provided by the employer for private travel.

Van and fuel charge
Van
Fuel
Total
Tax (20% taxpayer)
£600
£112.80
£712.80
Tax (40% taxpayer)
£1,200
£225.60
£1,425.60
Tax (45% taxpayer)
£1,350
£253.80
£1,603.80
Employer's Class 1A NICs
£414
£77.83
£491.83

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.