Budget Report 24 March 2010

Vehicle Taxation

Company cars

Tax and National Insurance Contributions (NICs) are calculated on the benefit-in-kind (BIK) on a car, which is determined, principally, by the price of the car and its official carbon dioxide (CO2) emissions rating. The list price of the car when new (including accessories) is multiplied by the indicated percentage from the table below, using the official emissions rating for the appropriate fuel of the car to derive the BIK.

2010/11 Taxable benefits table

CO2 EMISSIONS (g/km)*	PETROL	DIESEL
1 to 75	5%	8%**
76 to 120	10%	13%
121 to 134	15%	18%
135 to 139	16%	19%
140 to 144	17%	20%
145 to 149	18%	21%
150 to 154	19%	22%
155 to 159	20%	23%
160 to 164	21%	24%
165 to 169	22%	25%
170 to 174	23%	26%
175 to 179	24%	27%
180 to 184	25%	28%
185 to 189	26%	29%
190 to 194	27%	30%
195 to 199	28%	31%
200 to 204	29%	32%
205 to 209	30%	33%
210 to 214	31%	34%
215 to 219	32%	35%
220 to 224	33%	35%
225 to 229	34%	35%
Over 230	35%	35%

 

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

** At the time of going to press HM Revenue & Customs were unable to clarify whether the 3% diesel supplement applies.
 

Discounts from the above percentages can apply for ‘greener’ cars running on alternative fuels, including Euro IV diesel cars first registered up to 31 December 2005.

Taxable benefit charges on zero-emission vehicles and low emission cars

Legislation in Finance Bill 2010 will introduce a relief from the chargeable benefit where the car or van concerned cannot produce CO2 engine emissions under any circumstances when driven.

The legislation will also introduce a reduction to the chargeable benefit where a car has an approved CO2 engine emission figure of between 1 and 75g per kilometre. Company cars within this threshold will be subject to tax of 5 per cent of their list price and the measure will have effect from 6 April 2010 to 5 April 2015. At the time of going to press HM Revenue & Customs were unable to clarify whether the 3% diesel supplement applies.

Fuel for private mileage

If an employer provides fuel for any private travel, the taxable benefit is calculated by multiplying £18,000 by the percentage used to calculate the benefit on the car, the employer pays NICs on the same amount at 12.8%.

Baseline fuel mileage rates (in a company car)

 

	RATES PER MILE	RATES PER MILE	RATES PER MILE
ENGINE CAPACITY	PETROL	DIESEL	LPG
Up to 1,400cc	11p	11p	7p
1,401 to 2,000cc	14p	11p	8p
Over 2,000cc	20p	14p	12p

 

These rates are reviewed biannually depending on changes in the price of fuel, and changes (if any) take effect on 1 January and 1 July each year, so the next change in rates would be due on 1 July 2010.
 

If the employee uses a privately owned car for business journeys, the employer may reimburse the costs at the following standard rates without the employee incurring a tax or NIC charge:

 

VEHICLE	FIRST 10,000 MILES	THEREAFTER
Car/ van	40p	25p
Motorcycle	24p	24p
Bicycle	20p	20p

 

If the employer reimburses at a lower rate per mile, the employee is permitted to claim tax relief on the shortfall. Although unchanged for some time, as a policy issue it has been decided to retain these rates for the future.

Vehicle excise duty rates for cars as from 1 April 2010

FOR CARS REGISTERED ON OR AFTER			1 APRIL 2010	1 MARCH 2001
BAND			FIRST YEAR Rate	STANDARD Rate
	g/km		£	£
A	Less than 101		0	0
B	101 to 110		0	20
C	111 to 120		0	30
D	121 to 130		0	90
E	131 to140		110	110
F	141 to 150		125	125
G	151 to 165		155	155
H	166 to 175		250	180
I	176 to 185		300	200
J	186 to 200		425	235
K*	201 to 225		550	245
L	226 to 255		750	425
M	Over 255		950	435

 

* Includes cars emitting over 225g/km registered between 1 March 2001 and 23 March 2006.
 

© 2012 McAllen and Co | Vehicle taxation

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