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information
company cars
Vehicle benefits
Chargeable
on employees earning £8,500 or over (including benefits),
and directors.
Car Benefit
Car Fuel Benefits
Company Vans
Mileage Allowances
Fuel-only mileage Rates
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 2008/09 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
|
|
120
and below
|
10%
|
13%
|
|
|
|
|
|
|
|
121
to 139
|
15%
|
18%
|
170
to 174
|
22%
|
25%
|
205
to 209
|
29%
|
32%
|
|
140
to 144
|
16%
|
19%
|
175
to 179
|
23%
|
26%
|
210
to 214
|
30%
|
33%
|
|
145
to 149
|
17%
|
20%
|
180
to 184
|
24%
|
27%
|
215
to 219
|
31%
|
34%
|
|
150
to 154
|
18%
|
21%
|
185
to 189
|
25%
|
28%
|
220
to 224
|
32%
|
35%
|
|
155
to 159
|
19%
|
22%
|
190
to 194
|
26%
|
29%
|
225
to 229
|
33%
|
35%
|
|
160
to 164
|
20%
|
23%
|
195
to 199
|
27%
|
30%
|
230
to 234
|
34%
|
35%
|
|
165
to 169
|
21%
|
24%
|
200
to 204
|
28%
|
31%
|
235
and over
|
35%
|
35%
|
How
to find out how much CO2 your
company car emits - see:
- the car's V5 registration document
- the Vehicle Certification Agency - www.vca.gov.uk
- your dealer
the data pages of car magazines (current models)
- the website of the Society of Motor Manufacturers and Traders
- www.smmt.co.uk/co2/co2search.cfm
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
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 2008/09, is calculated by
multiplying £16,900 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 177 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 2008/09
tax bill for the fuel is: £16,900 x 23% x 40% = £1,554.80
Company vans
The taxable benefit for the unrestricted use of company vans
is £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.
| Van
and fuel charge |
Van |
Fuel |
Total |
| Tax
(20% taypayer) |
£600 |
£100 |
£700 |
| Tax
(40% taxpayer) |
£1,200 |
£200 |
£1,400 |
| Employer's
class 1A NIC's |
£384 |
£64 |
£448 |
Van drivers can avoid a benefit charge if the 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.
Mileage Allowances
For employees using their own Transport
The approved maximum tax and national insurance free mileage
allowances for employees using their own transport for business
are as follows:
| Flat
Rate |
First
10,000 miles |
Miles
over 10,000 |
| Car
/ Van |
40p |
25p |
| Motorcycle |
24p |
24p |
| Bicycle |
20p |
20p |
Income Tax and NIC's are due when allowances exceed these rates.
Employees can claim tax relief on any shortfall. Rates of up
to 5p per mile, per passenger, are also tax and NIC free when
paid for the carriage of fellow employees on the same business
trip.
Fuel-Only Mileage rates
HMRC advisory mileage rates as at January 2008 for employee
private mileage reimbursement or employer reimbursement of
business mileage are:
| |
Petrol |
Diesel |
LPG |
| Up
to 1400cc |
11p |
11p |
7p |
| 1401cc
- 2000cc |
13p |
11p |
8p |
| Over
2000cc |
19p |
14p |
11p |
|
