Company cars

• Car benefit
• Car fuel benefit
• VAT on scale charges
• VED rates

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:

Company car tax rates

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.

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Car 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

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VAT fuel scale charges

Fuel scale charges commencing 1 May 2010 to 30 April 2012

Fuel scale charges for VAT

• 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 periods

CO2 band g/km	From 1 May 2010	From 1 May 2011
120 or less	47.00	52.00
125	70.00	78.00
130	70.00	84.00
135	75.00	89.00
140	80.00	94.00
145	85.00	99.00
150	89.00	105.00
155	94.00	110.00
160	99.00	115.00
165	104.00	120.00
170	108.00	126.00
175	113.00	131.00
180	118.00	136.00
185	122.00	141.00
190	127.00	147.00
195	132.00	152.00
200	137.00	157.00
205	141.00	162.00
210	146.00	168.00
215	151.00	173.00
220	156.00	178.00
225 or more	160.00	183.00
230
230 or more	165.00

VAT fuel scale charges for 3 month periods

CO2 band g/km	From 1 May 2010	From 1 May 2011
120 or less	141.00	157.00
125	212.00	236.00
130	212.00	252.00
135	227.00	268.00
140	241.00	283.00
145	255.00	299.00
150	269.00	315.00
155	283.00	331.00
160	297.00	346.00
165	312.00	362.00
170	326.00	378.00
175	340.00	394.00
180	354.00	409.00
185	368.00	425.00
190	383.00	441.00
195	397.00	457.00
200	411.00	472.00
205	425.00	488.00
210	439.00	504.00
215	454.00	520.00
220	468.00	536.00
225 or more	482.00	551.00
230
230 or more	496.00

VAT fuel scale charges for 12 month period

CO2 band g/km	From 1 May 2010	From 1 May 2011
120 or less	570.00	630.00
125	850.00	945.00
130	850.00	1,010.00
135	910.00	1,070.00
140	965.00	1,135.00
145	1,020.00	1,200.00
150	1,080.00	1,260.00
155	1,135.00	1,325.00
160	1,190.00	1,385.00
165	1,250.00	1,450.00
170	1,305.00	1,515.00
175	1,360.00	1,575.00
180	1,420.00	1,640.00
185	1,475.00	1,705.00
190	1,530.00	1,765.00
195	1,590.00	1,830.00
200	1,645.00	1,890.00
205	1,705.00	1,955.00
210	1,760.00	2,020.00
215	1,815.00	2,080.00
220	1,875.00	2,145.00
225 or more	1,930.00	2,205.00
230
230 or more	1,985.00

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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

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