Vehicle Benefits

Chargeable on employees earning £8,500 or over (including benefits), and directors.

Car Benefit

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 2015/12 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 Benefit


  Van under 4 years old Van 4 years old, or over
Benefit per vehicle including fuel for private use £500 £350


Company vans

From 6 April 2015 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 2015 from £200 to £1,400 p.a., and the employer's Class1A NIC payable will increase from £64 to £448 p.a.

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.

The taxable car fuel benefit, for 2015/12, 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 2015/12 tax bill for the fuel is: £14,400 x 23% x 40% = £1,324.80.

 

 

 

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