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Vehicles

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Car Benefit

The car benefit is calculated at a percentage given by a table and on list price.

For diesel cars add a 3% supplement but the maximum is 37%.

The list price includes accessories.

The list price is reduced for capital contributions made by the employee up to £5,000.

Special rules may apply to cars provided for disabled employees.

For cars registered before 1 January 1998 and cars with no agreed CO2 emissions the charge is based on engine size.

2016/17:

CO2 emissions (gm/km) 1 % of car’s list price taxed
0 up to 50 7
51 to 75 11
76 up to 94 15
95 16
100 17
105 18
110 19
115 20
120 21
125 22
130 23
135 24
140 25
145 26
150 27
155 28
160 29
165 30
170 31
175 32
180 33
185 34
190 35
195 36
200 and above 37

2015/16:

CO2 emissions (gm/km) 1 % of car’s list price taxed
0 up to 50 5
51 to 75 9
76 up to 94 13
95 14
100 15
105 16
110 17
115 18
120 19
125 20
130 21
135 22
140 23
145 24
150 25
155 26
160 27
165 28
170 29
175 30
180 31
185 32
190 33
195 34
200 35
205 36
210 and above 37

Note…

  1. Round down to nearest 5gm/km for values above 95

Car Fuel Benefit

Car fuel benefit applies if an employee has the benefit of private fuel for a company car.

The benefit is calculated by applying the percentage used to calculate the car benefit by a ‘fuel charge multiplier’.

The charge is proportionately reduced if provision of private fuel ceases part way through the year. The fuel benefit is reduced to nil only if the employee pays for all private fuel.

The charge does not apply to certain environmentally friendly cars.

Fuel charge multiplier: £22,200 (2015/16: £22,100)

Van Benefit

Van benefit is chargeable if the van is available for an employee’s private use.

A fuel benefit may also be chargeable if an employee has the benefit of private fuel paid for in respect of a company van.

The charges do not apply to vans if a ‘restricted private use condition’ is met throughout the year.

A reduced benefit charge may apply to vans which cannot emit CO2 when driven. Prior to 6 April 2015 no benefit applied to these vans.

Van benefit: £3,170 (2015/16: £3,150)

Fuel benefit: £598 (2015/16: £594)

Advisory Fuel Rates for Company Cars

Advisory rates only apply where employers reimburse employees for business travel in a company car or require employees to repay the cost of fuel used for private travel in a company car. If the rate paid per mile of business travel is no higher than the advisory rate for the particular engine size and fuel type of the car, HMRC will accept that there is no taxable profit and no Class 1 NIC liability.

From 1 March 2017:

Petrol

Engine size (cc) Pence per mile
1400 or less 11
1401 to 2000 14
Over 2000 22

Diesel

Engine size (cc) Pence per mile
1600 or less 9
1601 to 2000 11
Over 2000 13

LPG

Engine size (cc) Pence per mile
1400 or less 7
1401 to 2000 9
Over 2000 14

Notes…

  1. Hybrid cars are treated as either petrol or diesel cars for this purpose.

Mileage Allowance Payments for Employees

Mileage Allowance Payments (MAPs) are what an employee can receive from their employer for using their own vehicle for business journeys.

An employer is allowed to pay an employee a certain amount of MAPs each year without having to report payments to HMRC.

If the employee receives less than the statutory rate, tax relief can be claimed on the difference.

2016/17 and 2015/16:

Vehicle type Pence per mile
Cars and vans – up to 10,000 miles 45
– over 10,000 miles 25
Bicycles 20
Motorcycles 24

Vehicle Excise Duty for Passenger Cars

For vehicles registered since 1st March 2001, the CO2 shown on the V5 (Registration Document) is used as the basis for applying Vehicle Excise Duty (VED), or ‘Road Tax’ rates for passenger cars.

‘Standard’ rates of vehicle tax for cars (petrol and diesel)

Band CO2 emission (g/km) First year (£) 1 Subsequent years (£) 1
A Up to 100 0 0
B 101-110 0 20
C 111-120 0 30
D 121-130 0 110
E 131-140 130 130
F 141-150 145 145
G 151-165 180 180
H 166-175 295 205
I 176-185 350 225
J 186-200 490 265
K 2 201-225 640 290
L 226-255 870 490
M Over 255 1,100 505

Notes…

  1. 12 months rate.
  2. Includes cars with a CO2 figure over 225gm/km but were registered before 23 March 2006.

VAT fuel scale charges

Businesses must use these VAT fuel scale charges from the start of their next prescribed accounting period beginning on or after 1 May 2016.

Monthly

CO2 band (g/km) Gross (£) VAT (£) Net (£)
≤120 38 6.33 31.67
125 58 9.67 48.33
130 61 10.17 50.83
135 65 10.83 54.17
140 69 11.50 57.50
145 73 12.17 60.83
150 77 12.83 64.17
155 81 13.50 67.50
160 85 14.17 70.83
165 89 14.83 74.17
170 92 15.33 76.67
175 96 16 80
180 101 16.83 84.17
185 104 17.33 86.67
190 108 18 90
195 112 18.67 93.33
200 116 19.33 96.67
205 120 20 100
210 123 20.50 102.50
215 128 21.33 106.67
220 132 22 110
225 or more 135 22.50 112.50

Quarterly

CO2 band (g/km) Gross (£) VAT (£) Net (£)
≤120 116 19.33 96.67
125 175 29.17 145.83
130 186 31 155
135 197 32.83 164.17
140 209 34.83 174.17
145 221 36.83 184.17
150 233 38.83 194.17
155 245 40.83 204.17
160 256 42.67 213.33
165 268 44.67 223.33
170 279 46.50 232.50
175 291 48.50 242.50
180 303 50.50 252.50
185 314 52.33 261.67
190 326 54.33 271.67
195 338 56.33 281.67
200 350 58.33 291.67
205 362 60.33 301.67
210 373 62.17 310.83
215 384 64 320
220 396 66 330
225 or more 408 68 340

Annually

CO2 band (g/km) Gross (£) VAT (£) Net (£)
≤120 467 77.83 389.17
125 699 116.5 582.50
130 747 124.50 622.50
135 792 132 660
140 841 140.17 700.83
145 886 147.67 738.33
150 934 155.67 778.33
155 979 163.17 815.83
160 1,028 171.33 856.67
165 1,073 178.83 894.17
170 1,121 186.83 934.17
175 1,166 194.33 971.67
180 1,214 202.33 1,011.67
185 1,259 209.83 1,049.17
190 1,308 218 1,090
195 1,353 225.50 1,127.50
200 1,401 233.50 1,167.50
205 1,446 241 1,205
210 1,495 249.17 1,245.83
215 1,540 256.67 1,283.33
220 1,588 264.67 1,323.33
225 or more 1,633 272.17 1,360.83

Where the CO2 emission figure is not a multiple of five, the figure is rounded down to the next multiple of five to determine the level of the charge. For a bi-fuel vehicle which has two CO2 emissions figures, the lower of the two figures should be used. For cars which are too old to have a CO2 emissions figure, you should identify the CO2 band based on engine size, as follows:

  • If its cylinder capacity is 1,400cc or less, use CO2 band 140;
  • If its cylinder capacity exceeds 1,400cc but does not exceed 2,000cc, use CO2 band 175; and
  • If its cylinder capacity exceeds 2,000cc, use CO2 band 225 or above.