Vehicle benefits

Fuel, car and van benefits.

Chargeable on directors and employees.

Car Benefit

The taxable benefit is calculated as a percentage of the list price of the car, on the day before it was registered, plus certain accessories. The percentage depends upon the rate at which the car emits carbon dioxide (CO2), and the fuel type.

You can find the appropriate percentage for 2017/18 using the following table.

CO2 emissions Appropriate percentage
(g/km) Petrol % Diesel %
0 - 50 9 12
51 - 75 13 16
76 - 94 17 20
95 - 99 18 21
100 - 104 19 22
105 - 109 20 23
110 - 114 21 24
115 - 119 22 25
120 - 124 23 26
125 - 129 24 27
130 - 134 25 28
135 - 139 26 29
140 - 144 27 30
145 - 149 28 31
150 - 154 29 32
155 - 159 30 33
160 - 164 31 34
165 - 169 32 35
170 - 174 33 36
175 - 179 34 37
180 - 184 35
185 - 189 36
190 and above 37

CO2 emission information

For cars registered from March 2001, the definitive CO2 figure used to calculate company car tax will be that shown on the car's V5 (Registration Document). The Vehicle Certification Agency (VCA) supplies CO2 (and other emissions) data. Information on CO2 emissions for both new (unregistered) and used (registered) cars can be found here.

Cars registered before 1 January 1998

Reliable emissions data is not widely available for cars registered before 1 January 1998.

Taxable percentages regardless of fuel type for cars registered before 1 January 1998
Engine capacity Taxable %
Up to 1400cc 15%
1401 - 2000cc 22%
Over 2000cc 32%

Car fuel benefit

The taxable car fuel benefit, for 2017/18, is calculated by applying the CO2 based car benefit percentage to the car fuel benefit charge multiplier of £22,600.

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.

HMRC advisory mileage rates from 1 December 2017 for employee private mileage reimbursement or employer reimbursement of business mileage in company cars are:

Fuel-only mileage rates for petrol and LPG
Engine Size Petrol LPG
1400cc or less 11p 7p
1401cc - 2000cc 14p 9p
Over 2000cc 21p 14p
Fuel-only mileage rates for diesel
Engine Size Diesel
1600cc or less 9p
1601cc - 2000cc 11p
Over 2000cc 13p

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 2017/18 tax bill on the car is: £21,000 x 34% x 40% = £2,856.

If the employer provides any fuel used for private journeys and is not reimbursed for the cost, the 2017/18 tax bill for the fuel is: £22,600 x 34% x 40% = £3,073.60.

Company vans

The taxable benefit for the unrestricted use of company vans is £3,230 (with no reduction for older vans) plus a further £610 of taxable benefit if fuel is provided by the employer for private travel.

Van and fuel charge
Tax Type Van Fuel Total
Tax (20% taxpayer) £646 £122 £768
Tax (40% taxpayer) £1,292 £244 £1,536
Tax (45% taxpayer) £1,453.50 £274.50 £1,728
Employer's Class 1A NICs £445.74 £84.18 £529.92

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 £3,230 is reduced by 80% to £646 for vans which cannot produce C02 engine emissions under any circumstances when driven. There will be no fuel benefit for such vans.


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