Vehicle benefits - Egan Roberts Accountants Ribchester Lancashire
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Vehicle benefits

Helping you from the beginning

Chargeable on employees and directors.

The fuel benefit charge (FBC) multiplier for 2018/19 is £23,400.

Car benefit

The tax you pay on your company car is governed by 5 factors (assuming that the car is made available for the full tax year):

  • The list price of the car, on the day before it was first registered, plus certain accessories
  • The rate at which the car emits carbon dioxide CO2
  • The fuel type (for most types of car, this is all the information you need to work out the taxable benefit)
  • Your highest rate of income tax
  • Any capital contribution to the cost of the car up to a maximum of £5,000.

You can find your taxable percentage using the following table:

2018/19 company car taxable benefits table

CO2 emissions (g/km)* Petrol
 0 to 50 13%
51 to 75 16%
76 to 94 19%
95 to 99 20%
100 to 104 21%
105 to 109 22%
110 to 114 23%
115 to 119 24%
120 to 124 25%
125 to 129 26%
130 to 134 27%
135 to 139 28%
140 to 144 29%
145 to 149 30%
150 to 154 31%
155 to 159 32%
160 to 164 33%
165 to 169 34%
170 to 174 35%
175 to 179 36%
180 and over 37%

*The exact CO2 figure is rounded down to the nearest 5g/km.

Add 4% if car runs solely on diesel up to a maximum of 37% for 2018/19.

How to find out how much CO2 your company car emits – see:

  • The car’s V5 registration document
  • Your dealer
  • The data pages of car magazines (current models)
  • The Vehicle Certification Agency
  • The website of the Society of Motor Manufacturers and Traders

Reliable emissions data is not widely available for cars registered before 1 January 1998. For them, the following taxable percentages apply, regardless of fuel type:

Engine capacity Taxable %
Up to 1400cc 15%
1401 – 2000cc 22%
Over 2000cc 32%

Car fuel benefits

If the employee pays for the full cost of all fuel for private journeys (usually including home to work) there will be no car fuel benefit. In all other cases the full tax charge will be due.

The taxable car fuel benefit, for 2018/19, is calculated by multiplying £23,400 by the same percentage as applies (or would apply) for the car benefit.

Example: A company car driver has a car which, on the day before it was first registered, had a list price of £30,000. It runs on petrol, and emits 165g/km of CO2.

If we assume the driver pays tax at 40%, the annual tax bill on the car is: £30,000 x 34% x 40% = £4,080.

If the employer provides any fuel used for private journeys and is not reimbursed for the cost, the 2018/19 tax bill for the fuel is: £23,400 x 34% x 40% = £3,182.40.

Company vans

The taxable benefit for any private use of company vans is £3,350; however, if the only private use of the van is for home-to-work travel then the van is not taxable; insignificant other private use can also be ignored but care is needed. There is also a taxable benefit of £633 if any fuel is provided by the employer for private travel (including home-to-work travel).

The tax payable for both van and fuel benefit (for private use) for a basic rate (20%) payer is £796.60, a 40% payer is £1,593.20 and someone paying 45% tax and using a company van would be £1,792.35.

Company vans which do not have emissions attract a benefit-in-kind charge.

For 2018/19 this will be 40% of the full charge ie £1,340 (ie 20% X £3,350).

The company’s class 1A NIC payable ranges from £184.92 to £549.65.

Beyond 2018

For 2019/20 all the above rates are uplifted by 3%.

From April 2020, there will be new lower bands for the lowest emitting cars (ULEVs). The appropriate percentages will be:

  • zero-emission cars: 2%
  • cars with CO2 emissions between 1g/km and 50g/km: range from 2-14%, depending on the number of zero-emission miles the vehicle can travel.

The changes also increase the appropriate percentages by 1% to a maximum value of 37% for cars with CO2 emissions of 90g/km and above.

These changes will affect employers and those individuals participating in company car schemes.