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Company Cars
Car benefit
The threshold CO2 emissions rate is frozen at 140 g/km until 5 April 2008. The threshold for 2008/09 will be 135 g/km. The rate of the taxable benefit ranges from 15% to 35% of list price (plus certain accessories) for most petrol or diesel-powered cars.
You can find your taxable percentage of the list price for 2007/08 using the following table:
2008/09 taxable benefits table
| CO2 in g/km* | Taxable % | CO2 in g/km* | Taxable % | ||
|---|---|---|---|---|---|
| Petrol | Diesel | Petrol | Diesel | ||
| Less than 121 | 10% | 13% | 185 to 189 | 25% | 28% |
| 121 to 139 | 15% | 18% | 190 to 194 | 26% | 29% |
| 140 to 144 | 16% | 19% | 195 to 199 | 27% | 30% |
| 145 to 149 | 17% | 20% | 200 to 204 | 28% | 31% |
| 150 to 154 | 18% | 21% | 205 to 209 | 29% | 32% |
| 155 to 159 | 19% | 22% | 210 to 214 | 30% | 33% |
| 160 to 164 | 20% | 23% | 215 to 219 | 31% | 34% |
| 165 to 169 | 21% | 24% | 220 to 224 | 32% | 35% |
| 170 to 174 | 22% | 25% | 225 to 229 | 33% | 35% |
| 175 to 179 | 23% | 26% | 230 to 234 | 34% | 35% |
| 180 to 184 | 24% | 27% | 235 and over | 35% | 35% |
| * The exact CO2 figure is rounded down to the nearest 5g/km | |||||
| Gas Guzzlers |
|---|
| But the chancellor was accused by critics of doing too little to confront global warming, despite backing a review by the economist Sir Nicholas Stern that called for urgent action on the environment |
Diesel cars are generally subject to a 3% surcharge - with some exceptions, the taxable benefit for a diesel car is 3% higher than for a petrol car with identical CO2 emissions. The 3% surcharge was waived for cars which complied with Euro IV emissions standards, and this applies to 5 April 2006. Thereafter, the waiver applies only to Euro IV compliant cars first registered no later than 31 December 2005.
The discounts for lower emissions vehicles are:
- 2% for bi-fuel lpg and petrol cars manufactured or converted before type approval
- 3% for hybrid electric and petrol cars
- 6% for electric-only cars.
With effect from 2008/09, there will be a reduced taxable percentage rate of 10% for those cars with CO2 emissions of 120 g/km or less.
Back to topCar fuel benefit
The multiplier for car fuel benefit has not changed since the current scheme was introduced. It stands at £14,400.
Car and fuel benefit calculation
The amount chargeable to income tax (user) and Class 1A national insurance contributions (employer) for 2007/08 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 2007) and which emits carbon dioxide at a rate of 180 g/km.
| Car benefit | Petrol | Diesel |
| List price | £18,000 | £18,000 |
| Taxable percentage | 23% | 26% |
| Taxable benefit | £4,140 | £4,680 |
| Tax (22% taxpayer) | £911 | £1,030 |
| Tax (40% taxpayer) | £1,656 | £1,872 |
| Employer’s Class 1A NIC | £530 | £599 |
| Fuel benefit | Petrol | Diesel |
| Multiplier | £14,400 | £14,400 |
| Taxable percentage | 23% | 26% |
| Taxable benefit | £3,312 | £3,744 |
| Tax (22% taxpayer) | £729 | £824 |
| Tax (40% taxpayer) | £1,325 | £1,498 |
| Employer’s Class 1A NIC | £424 | £479 |
VAT fuel scale charges
- 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 period
| CO2 band g/km | VAT fuel scale charge 1 month period |
VAT on 1 month charge |
VAT exclusive 1 month charge |
|---|---|---|---|
| 120 or less | 46.00 | 6.85 | 39.15 |
| 125 | 69.00 | 10.28 | 58.72 |
| 130 | 69.00 | 10.28 | 58.72 |
| 135 | 69.00 | 10.28 | 58.72 |
| 140 | 73.00 | 10.87 | 62.13 |
| 145 | 78.00 | 11.62 | 66.38 |
| 150 | 82.00 | 12.21 | 69.79 |
| 155 | 87.00 | 12.96 | 74.04 |
| 160 | 92.00 | 13.70 | 78.30 |
| 165 | 96.00 | 14.30 | 81.70 |
| 170 | 101.00 | 15.04 | 85.96 |
| 175 | 105.00 | 15.64 | 89.36 |
| 180 | 110.00 | 16.38 | 93.62 |
| 185 | 115.00 | 17.13 | 97.87 |
| 190 | 119.00 | 17.72 | 101.28 |
| 195 | 124.00 | 18.47 | 105.53 |
| 200 | 128.00 | 19.06 | 108.94 |
| 205 | 133.00 | 19.81 | 113.19 |
| 210 | 138.00 | 20.55 | 117.45 |
| 215 | 142.00 | 21.15 | 120.85 |
| 220 | 147.00 | 21.89 | 125.11 |
| 225 | 151.00 | 22.49 | 128.51 |
| 230 | 156.00 | 23.23 | 132.77 |
| 235 or more | 161.00 | 23.98 | 137.02 |
VAT fuel scale charges for 3 month periods
| CO2 band | VAT fuel scale charge 3 month period £ |
VAT on 3 month charge £ |
VAT exclusive 3 month charge £ |
|---|---|---|---|
| 120 or less | 138.00 | 20.55 | 117.45 |
| 125 | 207.00 | 30.83 | 176.17 |
| 130 | 207.00 | 30.83 | 176.17 |
| 135 | 207.00 | 30.83 | 176.17 |
| 140 | 221.00 | 32.91 | 188.09 |
| 145 | 234.00 | 34.85 | 199.15 |
| 150 | 248.00 | 36.94 | 211.06 |
| 155 | 262.00 | 39.02 | 222.98 |
| 160 | 276.00 | 41.11 | 234.89 |
| 165 | 290.00 | 43.19 | 246.81 |
| 170 | 303.00 | 45.13 | 257.87 |
| 175 | 317.00 | 47.21 | 269.79 |
| 180 | 331.00 | 49.30 | 281.70 |
| 185 | 345.00 | 51.38 | 293.62 |
| 190 | 359.00 | 53.47 | 305.53 |
| 195 | 373.00 | 55.55 | 317.45 |
| 200 | 386.00 | 57.49 | 328.51 |
| 205 | 400.00 | 59.57 | 340.43 |
| 210 | 414.00 | 61.66 | 352.34 |
| 215 | 428.00 | 63.74 | 364.26 |
| 220 | 442.00 | 65.83 | 376.17 |
| 225 | 455.00 | 67.77 | 387.23 |
| 230 | 469.00 | 69.85 | 399.15 |
| 235 or more | 483.00 | 71.94 | 411.06 |
VAT fuel scale charges for 12 month periods
| CO2 band | VAT fuel scale charge 12 month period £ |
VAT on 12 month charge £ |
VAT exclusive 12 month charge £ |
|---|---|---|---|
| 120 or less | 555.00 | 82.66 | 472.34 |
| 125 | 830.00 | 123.62 | 706.38 |
| 130 | 830.00 | 123.62 | 706.38 |
| 135 | 830.00 | 123.62 | 706.38 |
| 140 | 885.00 | 131.81 | 753.19 |
| 145 | 940.00 | 140.00 | 800.00 |
| 150 | 995.00 | 148.19 | 846.81 |
| 155 | 1,050.00 | 156.38 | 893.62 |
| 160 | 1,105.00 | 164.57 | 940.43 |
| 165 | 1,160.00 | 172.77 | 987.23 |
| 170 | 1,215.00 | 180.96 | 1,034.04 |
| 175 | 1,270.00 | 189.15 | 1,080.85 |
| 180 | 1,325.00 | 197.34 | 1,127.66 |
| 185 | 1,380.00 | 205.53 | 1,174.47 |
| 190 | 1,435.00 | 213.72 | 1,221.28 |
| 195 | 1,490.00 | 221.91 | 1,268.09 |
| 200 | 1,545.00 | 230.11 | 1,314.89 |
| 205 | 1,605.00 | 239.04 | 1,365.96 |
| 210 | 1,660.00 | 247.23 | 1,412.77 |
| 215 | 1,715.00 | 255.43 | 1,459.57 |
| 220 | 1,770.00 | 263.62 | 1,506.38 |
| 225 | 1,825.00 | 271.81 | 1,553.19 |
| 230 | 1,880.00 | 280.00 | 1,600.00 |
| 235 or more | 1,935.00 | 288.19 | 1,646.81 |
VED rates
| Band | CO2 emissions g/km | Petrol | Diesel | Alternative fuel |
| A | 100 and below | £0 | £0 | £0 |
| B | 101 - 120 | £35 | £35 | £15 |
| C | 121 - 150 | £115 | £115 | £95 |
| D | 151 - 165 | £140 | £140 | £120 |
| E | 166 - 185 | £165 | £165 | £145 |
| F | 186 - 225 | £205 | £205 | £190 |
| G* | 226 and above | £300 | £300 | £285 |
| * New cars registered from 23 March 2006 | ||||