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Car Benefit

The car benefit is calculated by multiplying the car’s list price, when new, by a percentage linked to the car’s CO2 emissions. Due to a change in the way CO2 emissions are measured different benefit percentages apply to cars registered from 6 April 2020.

For diesel cars generally add a 4% supplement (unless the car is registered on or after 1 September 2017 and meets the Euro 6d emissions standard). The overall maximum percentage is capped at 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.

2021/22:

CO2 emissions (gm/km)

Registered Pre 6/4/20

Registered after 5/4/20

% of car’s price taxed

% of car’s price taxed

0

1

1

 

1-50: Electric range >130

2

1

1-50: Electric range 70-129

5

4

1-50: Electric range 40-69

8

7

1-50: Electric range 30-39

12

11

1-50: Electric range <30

14

13

 

51-54

15

14

55-59

16

15

60-64

17

16

65-69

18

17

70-74

19

18

75-79

20

19

80-84

21

20

85-89

22

21

90-94

23

22

95-99

24

23

100-104

25

24

105-109

26

25

110-114

27

26

115-119

28

27

120-124

29

28

125-129

30

29

130-134

31

30

135-139

32

31

140-144

33

32

145-149

34

33

150-154

35

34

155-159

36

35

160-164

37

36

165and above

37

37

2020/21:

CO2 emissions (gm/km)

Registered Pre 6/4/20

Registered after 5/4/20

% of car’s price taxed

% of car’s price taxed

0

0

0

 

1-50: Electric range >130

2

0

1-50: Electric range 70-129

5

3

1-50: Electric range 40-69

8

6

1-50: Electric range 30-39

12

10

1-50: Electric range <30

14

12

 

51-54

15

13

55-59

16

14

60-64

17

15

65-69

18

16

70-74

19

17

75-79

20

18

80-84

21

19

85-89

22

20

90-94

23

21

95-99

24

22

100-104

25

23

105-109

26

24

110-114

27

25

115-119

28

26

120-124

29

27

125-129

30

28

130-134

31

29

135-139

32

30

140-144

33

31

145-149

34

32

150-154

35

33

155-159

36

34

160-164

37

35

165-169

37

36

170 and above

37

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.

Fuel charge multiplier: £24,600 (2020/21: £24,500)

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.

Van benefit: £3,500 (2020/21: £3,490)

Fuel benefit: £669 (2020/21: £666)

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 September 2021:

Petrol

Engine size (cc)

Pence per mile

1400 or less

12

1401 to 2000

14

Over 2000

20

Diesel

Engine size (cc)

Pence per mile

1600 or less

10

1601 to 2000

12

Over 2000

15

LPG

Engine size (cc)

Pence per mile

1400 or less

7

1401 to 2000

8

Over 2000

12

Notes…

  1. Hybrid cars are treated as either petrol or diesel cars for this purpose.
  2. The Advisory Electricity Rate for fully electric cars is 4 pence per mile. Electricity is not a fuel for fuel car benefit purposes.

Mileage Allowance Payments (MAPs) for employees

MAPs represent the maximum tax free mileage allowances 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.

2021/22 and 2020/21:

Vehicle type

Pence per mile

Cars and vans

– up to 10,000 miles

45

– over 10,000 miles

25

Bicycles

20

Motorcycles

24