From April 2002 company car tax has been based on the car’s list price and official C0
2 emission figure. The
Inland Revenue can provide more detailed information if you need it.
The percentage used to calculate the benefit is based on carbon dioxide (CO2) emissions measured in grams per kilometre (g/km).
Initially a minimum charge of 15% of the car's price was applied to cars emitting CO2 at or below a specific level, measured in (g/km). This charge rises in 1% increments for every 5g/km over the minimum level (there is an upper ceiling of 35%).
Diesel cars: there is a supplement of 3% up to the maximum charge of 35%. This was waived for diesel cars first registered before the end of 2005 that met the EC emissions standards. Each vehicles Euro Standard is shown on the registration document for cars first registered after 1 March 2001. The AA also has information available about this
The Car Buyer's Guide.
2005 budget changes included the announcement that the threshold for the minimum percentage charge rate would be frozen at 140g/km, up to and including 2007/08.
2006 budget announced that the threshold for the minimum percentage charge rate for calculating benefit in kind from company cars will be reduced from 140g/km of C02 to 135g/km C02 for 2008–09. A new lower, 10% band for company cars with C02 emissions of 120g/km or lower was also announced and this too came into effect in 2008–09.
2009 budget report included the following changes to company car tax scheduled to come into effect from 6 April 2011;
- The basic threshold for the 15% band of company car tax will be reduced by 5g/km of CO2, so that this band will apply to cars emitting between 121 and 129g/km
- Company car drivers in cars that produce more than 129g/km will see their tax bill increase by 1% for every 5g per km increase in CO2 emissions, to a maximum of 35%
- Discounts currently available for Euro IV standard diesel cars registered before 1 January 2006, petrol-electric hybrid cars, road fuel gaas powered cars and E85 biofuel-capable cars will be removed from 6 April 2011
- Hybrid cars emitting 120g/km or less will continue to fall within the 10% band and electric cars will continue to be subject to the 9% band, the lowest for any type of company car
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