Home > > 21 March 2007 Budget Report > Company cars
Company cars
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
| Gas Guzzlers |
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| But the chancellor was accused by critics of doing too little to confront global warming, despite backing a review by the economist Sir Nicholas Stern that called for urgent action on the environment |
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.
Back to topCar 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 |
VAT fuel scale charges
Fuel scale charges for VAT for use from 1 May 2009
- 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 period
| CO2 band g/km | VAT fuel scale charge 1 month period |
|---|---|
| 120 or less | 42.00 |
| 125 | 63.00 |
| 130 | 63.00 |
| 135 | 63.00 |
| 140 | 67.00 |
| 145 | 71.00 |
| 150 | 75.00 |
| 155 | 79.00 |
| 160 | 83.00 |
| 165 | 88.00 |
| 170 | 92.00 |
| 175 | 96.00 |
| 180 | 100.00 |
| 185 | 104.00 |
| 190 | 109.00 |
| 195 | 113.00 |
| 200 | 117.00 |
| 205 | 121.00 |
| 210 | 126.00 |
| 215 | 130.00 |
| 220 | 134.00 |
| 225 | 138.00 |
| 230 | 142.00 |
| 235 or more | 147.00 |
VAT fuel scale charges for 3 month periods
| CO2 band | VAT fuel scale charge 3 month period £ |
|---|---|
| 120 or less | 126.00 |
| 125 | 189.00 |
| 130 | 189.00 |
| 135 | 189.00 |
| 140 | 201.00 |
| 145 | 214.00 |
| 150 | 226.00 |
| 155 | 239.00 |
| 160 | 251.00 |
| 165 | 264.00 |
| 170 | 276.00 |
| 175 | 289.00 |
| 180 | 302.00 |
| 185 | 314.00 |
| 190 | 327.00 |
| 195 | 339.00 |
| 200 | 352.00 |
| 205 | 365.00 |
| 210 | 378.00 |
| 215 | 390.00 |
| 220 | 403.00 |
| 225 | 416.00 |
| 230 | 428.00 |
| 235 or more | 441.00 |
VAT fuel scale charges for 12 month periods
| CO2 band | VAT fuel scale charge 12 month period £ |
|---|---|
| 120 or less | 505.00 |
| 125 | 755.00 |
| 130 | 755.00 |
| 135 | 755.00 |
| 140 | 805.00 |
| 145 | 855.00 |
| 150 | 905.00 |
| 155 | 960.00 |
| 160 | 1,010.00 |
| 165 | 1,060.00 |
| 170 | 1,110.00 |
| 175 | 1,160.00 |
| 180 | 1,210.00 |
| 185 | 1,260.00 |
| 190 | 1,310.00 |
| 195 | 1,360.00 |
| 200 | 1,410.00 |
| 205 | 1,465.00 |
| 210 | 1,515.00 |
| 215 | 1,565.00 |
| 220 | 1,615.00 |
| 225 | 1,665.00 |
| 230 | 1,715.00 |
| 235 or more | 1,765.00 |
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 | ||||
