Vehicle Benefits
Chargeable on employees earning £8,500 or over (including benefits),
and directors.
The tax you pay on your company car is governed by four factors:
- the list price of the car, on the day before it was first registered,
plus certain accessories,
- the rate at which the car emits carbon dioxide (CO2),
- the fuel type
(for most types of car, this is all the information you need to
work out the taxable benefit)
- your highest rate of income tax.
You can find your taxable percentage for 2005/06 using the following
table:
| CO2 in g/km |
Taxable % |
CO2 in g/km |
Taxable % |
CO2 in g/km |
Taxable % |
| Petrol |
Diesel |
Petrol |
Diesel |
Petrol |
Diesel |
| Less than 145 |
15% |
18% |
175 to 179 |
22% |
25% |
210 to 214 |
29% |
32% |
| 145 to 149 |
16% |
19% |
180 to 184 |
23% |
26% |
215 to 219 |
30% |
33% |
| 150 to 154 |
17% |
20% |
185 to 189 |
24% |
27% |
220 to 224 |
31% |
34% |
| 155 to 159 |
18% |
21% |
190 to 194 |
25% |
28% |
225 to 229 |
32% |
35% |
| 160 to 164 |
19% |
22% |
195 to 199 |
26% |
29% |
230 to 234 |
33% |
35% |
| 165 to 169 |
20% |
23% |
200 to 204 |
27% |
30% |
235 to 239 |
34% |
35% |
| 170 to 174 |
21% |
24% |
205 to 209 |
28% |
31% |
240 and over |
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% |
|
| |
Van under 4
years old |
Van 4 years
old, or over |
| Benefit per
vehicle |
£500 |
£350 |
|
Company vans
From 6 April 2005 there will be no taxable benefit where employees
have to take their company vans home and are not allowed any other
private use. Otherwise, the taxable benefit for the private use
of a company van and fuel, if supplied, is £500 or £350 (vans less
or more than four years old) per annum, until 5 April 2007.
With effect from 6 April 2007 the taxable benefit for the unrestricted
use of company vans will be £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.
The maximum tax payable on the use of a company van will therefore
increase from April 2007 from £200 to £1,400 p.a., and the employer's
Class1A NIC payable will increase from £64 to £448 p.a.
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.
The taxable car fuel benefit is, for 2005/06, is calculated by
multiplying £14,400 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 182 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 re-imbursed for the cost, the 2005/06 tax bill
for the fuel is: £14,400 x 23% x 40% = £1,324.80.
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