Chargeable on employees earning £8,500 or over (including benefits), and directors.
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 2007/08 using the following table:
| CO2 in g/km* |
Taxable % |
CO2 in g/km* |
Taxable % |
| Petrol |
Diesel |
Petrol |
Diesel |
| Less than 145 |
15% |
18% |
195 to 199 |
26% |
29% |
| 145 to 149 |
16% |
19% |
200 to 204 |
27% |
30% |
| 150 to 154 |
17% |
20% |
205 to 209 |
28% |
31% |
| 155 to 159 |
18% |
21% |
210 to 214 |
29% |
32% |
| 160 to 164 |
19% |
22% |
215 to 219 |
30% |
33% |
| 165 to 169 |
20% |
23% |
220 to 224 |
31% |
34% |
| 170 to 174 |
21% |
24% |
225 to 229 |
32% |
35% |
| 175 to 179 |
22% |
25% |
230 to 234 |
33% |
35% |
| 180 to 184 |
23% |
26% |
235 to 239 |
34% |
35% |
| 185 to 189 |
24% |
27% |
240 and over |
35% |
35% |
| 190 to 194 |
25% |
28% |
|
|
|
| * The exact CO2 figure is rounded down to the nearest 5g/km |
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)
- the Vehicle Certification Agency – www.vca.gov.uk
- 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% |
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 2007/08, 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 2007/08 tax bill for the fuel is: £14,400 x 23% x 40% = £1,324.80.
From 6 April 2007 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 is £1,400 p.a., and the employer's Class1A NIC payable is £448 p.a.