Company Cars and Vans

These are taxable benefits generally arise on employees earning £8,500 or over (including benefits) and directors. Company car benefit is calculated as a percentage (based on the car’s CO2 emissions rounded down to the next multiple of 5) of the car’s UK list price.

Company car fuel benefit is charged unless the cost of all fuel for private use is borne by the employee. The taxable benefit is calculated by applying the appropriate percentage to £21,500.

Where VAT is to be reclaimed on fuel for private use, the employer also has to account for output tax based on a fuel scale charge derived from the vehicle’s CO2 emissions (see table below).

Company van benefit is not related to CO2 emissions but is a set figure of £3,000 with an extra £564 where fuel for private use is provided. There is no benefit charge for certain environmentally friendly vans or where the restricted private use condition is met.

Mileage rates for employees using their own cars for business:
approved rates are 45p per mile for the first 10,000 miles and 25p thereafter. Income tax and NICs may be due on higher rates and tax relief may be due on lower rates.

CO 2
in g/km

Apropriate %
Petrol

Apropriate %
Diesel

CO2
in g/km

Apropriate %
Petrol

Apropriate %
Diesel

0

0

0

155-159

23

26

1-75

5

8

160-164

24

27

76-94

10

13

165-169

25

28

95-99

11

14

170-174

26

29

100-104

12

15

175-179

27

30

105-109

13

16

180-184

28

31

110-114

14

17

185-189

29

32

115-119

15

18

190-194

30

33

120-124 16 19 195-199 31 34
125-129 17 20 200-204 32  
130-134 18 21 205-209 33  
135-139 19 22 210-214 34 35
140-144 20 23 215 and above 35  
145-149 21 24      
150-154 22 25