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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 6/4/20Registered after 5/4/20
% of car's price taxed% of car's price taxed
011
 
1-50: Electric range >13021
1-50: Electric range 70-12954
1-50: Electric range 40-6987
1-50: Electric range 30-391211
1-50: Electric range <301413
 
51-541514
55-591615
60-641716
65-691817
70-741918
75-792019
80-842120
85-892221
90-942322
95-992423
100-1042524
105-1092625
110-1142726
115-1192827
120-1242928
125-1293029
130-1343130
135-1393231
140-1443332
145-1493433
150-1543534
155-1593635
160-1643736
165and above3737

2020/21:

CO2 emissions (gm/km)Registered Pre 6/4/20Registered after 5/4/20
% of car's price taxed% of car's price taxed
000
 
1-50: Electric range >13020
1-50: Electric range 70-12953
1-50: Electric range 40-6986
1-50: Electric range 30-391210
1-50: Electric range <301412
 
51-541513
55-591614
60-641715
65-691816
70-741917
75-792018
80-842119
85-892220
90-942321
95-992422
100-1042523
105-1092624
110-1142725
115-1192826
120-1242927
125-1293028
130-1343129
135-1393230
140-1443331
145-1493432
150-1543533
155-1593634
160-1643735
165-1693736
170 and above3737

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 less12
1401 to 200014
Over 200020

Diesel

Engine size (cc)Pence per mile
1600 or less10
1601 to 200012
Over 200015

LPG

Engine size (cc)Pence per mile
1400 or less7
1401 to 20008
Over 200012

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 typePence per mile
Cars and vans- up to 10,000 miles45
- over 10,000 miles25
Bicycles20
Motorcycles24