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 £21,700.

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 £3,090 with an extra £581 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

150-154

23

26

1-75

5

8

155-159

24

27

76-94

11

14

160-164

25

28

95-99

12

15

165-169

26

29

100-104

13

16

170-174

27

30

105-109

14

17

175-179

28

31

110-114

15

18

180-184

29

32

115-119

16

19

185-189

30

33

120-124 17 20 190-194 31 34
125-129 18 21 195-199 32  
130-134 19 22 200-204 33  
135-139 20 23 205-209 34 35
140-144 21 24 210 and above 35  
145-149 22 25