Company cars
The company car continues to be an important part of the remuneration package for many employees despite the increases in the taxable benefit rates over the last few years.
Employees and directors pay tax on the provision of the car and on the provision of fuel by employers for private mileage. Employers also pay Class 1A NICs at 12.8% on the same amount. This NIC charge is payable by the 19 July 2010, (or 22 July if paid electronically).
The amount on which tax and Class 1A NICs is paid in respect of a company car depends on a number of factors. Essentially, the amount charged is calculated by multiplying the list price of the car, including most accessories, by a percentage. The percentage is set by reference to the rate at which the car emits carbon dioxide, according to officially determined rates.
2010/11 taxable benefits table
| CO2 in g/km* | Taxable % | CO2 in g/km* | Taxable % | ||
|---|---|---|---|---|---|
| Petrol | Diesel | Petrol | Diesel | ||
| 1 to 75 | 5% | 8% | 180 to 184 | 25% | 28% |
| 76 to 120 | 10% | 13% | 185 to 189 | 26% | 29% |
| 121 to 134 | 15% | 18% | 190 to 194 | 27% | 30% |
| 135 to 139 | 16% | 19% | 195 to 199 | 28% | 31% |
| 140 to 144 | 17% | 20% | 200 to 204 | 29% | 32% |
| 145 to 149 | 18% | 21% | 205 to 209 | 30% | 33% |
| 150 to 154 | 19% | 22% | 210 to 214 | 31% | 34% |
| 155 to 159 | 20% | 23% | 215 to 219 | 32% | 35% |
| 160 to 164 | 21% | 24% | 220 to 224 | 33% | 35% |
| 165 to 169 | 22% | 25% | 225 to 229 | 34% | 35% |
| 170 to 174 | 23% | 26% | 230 and over | 35% | 35% |
| 175 to 179 | 24% | 27% | |||
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* The exact CO2 figure is rounded down to the nearest 5g/km |
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The discounts for lower emissions vehicles are:
- 2% for bi-fuel lpg and petrol cars manufactured or converted before type approval
- 2% for cars able to run on E85 fuel (type G cars)
- 3% for hybrid electric and petrol cars
Taxable benefit charges on zero-emission vehicles and low emission cars
Legislation in Finance Bill 2010 will introduce a relief from the chargeable benefit where the car or van concerned cannot produce CO2 engine emissions under any circumstances when driven.
The legislation will also introduce a reduction to the chargeable benefit where a car has an approved CO2 engine emission figure of between 1 and 75g per kilometre. Company cars within this threshold will be subject to tax of 5 per cent of their list price and the measure will have effect from 6 April 2010 to 5 April 2015.
Car fuel benefit
The multiplier for car fuel benefit has increased to £18,000.
Car and fuel benefit calculation
The amount chargeable to income tax (user) and Class 1A national insurance contributions (employer) for 2010/11 is calculated by multiplying list price (car benefit) or the fuel multiplier (fuel benefit) by a percentage based on the rate at which the car emits carbon dioxide (CO2 in g/km) (see table above).
Take a car with a list price of £18,000 when it was first registered (say 31 March 2008) and which emits carbon dioxide at a rate of 176 g/km.
| Car benefit | Petrol | Diesel |
| List price | £18,000 | £18,000 |
| Taxable percentage | 24% | 27% |
| Taxable benefit | £4,320 | £4,860 |
| Tax (20% taxpayer) | £864 | £972 |
| Tax (40% taxpayer) | £1,728 | £1,944 |
| Tax (50% taxpayer) | £2,160 | £2,430 |
| Employer’s Class 1A NIC | £553 | £622 |
| Fuel benefit | Petrol | Diesel |
| Multiplier | £18,000 | £18,000 |
| Taxable percentage | 24% | 27% |
| Taxable benefit | £4,320 | £4,860 |
| Tax (20% taxpayer) | £864 | £972 |
| Tax (40% taxpayer) | £1,728 | £1,944 |
| Tax (50% taxpayer) | £2,160 | £2,430 |
| Employer’s Class 1A NIC | £553 | £622 |
VAT fuel scale charges
Fuel scale charges for VAT
- VAT fuel scale charges for 1 month period
- VAT fuel scale charges for 3 month periods
- VAT fuel scale charges for 12 month periods
VAT fuel scale charges for 1 month periods
| CO2 band g/km | From 1 May 2010 | From 1 May 2009 |
|---|---|---|
| 120 or less | 47.00 | 42.00 |
| 125 | 70.00 | 63.00 |
| 130 | 70.00 | 63.00 |
| 135 | 75.00 | 63.00 |
| 140 | 80.00 | 67.00 |
| 145 | 85.00 | 71.00 |
| 150 | 89.00 | 75.00 |
| 155 | 94.00 | 79.00 |
| 160 | 99.00 | 83.00 |
| 165 | 104.00 | 88.00 |
| 170 | 108.00 | 92.00 |
| 175 | 113.00 | 96.00 |
| 180 | 118.00 | 100.00 |
| 185 | 122.00 | 104.00 |
| 190 | 127.00 | 109.00 |
| 195 | 132.00 | 113.00 |
| 200 | 137.00 | 117.00 |
| 205 | 141.00 | 121.00 |
| 210 | 146.00 | 126.00 |
| 215 | 151.00 | 130.00 |
| 220 | 156.00 | 134.00 |
| 225 | 160.00 | 138.00 |
| 230 | 142.00 | |
| 230 or more | 165.00 | |
| 235 or more | 147.00 |
VAT fuel scale charges for 3 month periods
| CO2 band g/km | From 1 May 2010 | From 1 May 2009 |
|---|---|---|
| 120 or less | 141.00 | 126.00 |
| 125 | 212.00 | 189.00 |
| 130 | 212.00 | 189.00 |
| 135 | 227.00 | 189.00 |
| 140 | 241.00 | 201.00 |
| 145 | 255.00 | 214.00 |
| 150 | 269.00 | 226.00 |
| 155 | 283.00 | 239.00 |
| 160 | 297.00 | 251.00 |
| 165 | 312.00 | 264.00 |
| 170 | 326.00 | 276.00 |
| 175 | 340.00 | 289.00 |
| 180 | 354.00 | 302.00 |
| 185 | 368.00 | 314.00 |
| 190 | 383.00 | 327.00 |
| 195 | 397.00 | 339.00 |
| 200 | 411.00 | 352.00 |
| 205 | 425.00 | 365.00 |
| 210 | 439.00 | 378.00 |
| 215 | 454.00 | 390.00 |
| 220 | 468.00 | 403.00 |
| 225 | 482.00 | 416.00 |
| 230 | 428.00 | |
| 230 or more | 496.00 | |
| 235 or more | 441.00 |
VAT fuel scale charges for 12 month period
| CO2 band g/km | From 1 May 2010 | From 1 May 2009 |
|---|---|---|
| 120 or less | 570.00 | 505.00 |
| 125 | 850.00 | 755.00 |
| 130 | 850.00 | 755.00 |
| 135 | 910.00 | 755.00 |
| 140 | 965.00 | 805.00 |
| 145 | 1,020.00 | 855.00 |
| 150 | 1,080.00 | 905.00 |
| 155 | 1,135.00 | 960.00 |
| 160 | 1,190.00 | 1,010.00 |
| 165 | 1,250.00 | 1,060.00 |
| 170 | 1,305.00 | 1,110.00 |
| 175 | 1,360.00 | 1,160.00 |
| 180 | 1,420.00 | 1,210.00 |
| 185 | 1,475.00 | 1,260.00 |
| 190 | 1,530.00 | 1,310.00 |
| 195 | 1,590.00 | 1,360.00 |
| 200 | 1,645.00 | 1,410.00 |
| 205 | 1,705.00 | 1,465.00 |
| 210 | 1,760.00 | 1,515.00 |
| 215 | 1,815.00 | 1,565.00 |
| 220 | 1,875.00 | 1,615.00 |
| 225 | 1,930.00 | 1,665.00 |
| 230 | 1,715.00 | |
| 230 or more | 1,985.00 | |
| 235 or more | 1,765.00 |
