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:

2008/09 taxable benefits table

CO2 in g/km*	Taxable %		CO2 in g/km*	Taxable %
	Petrol	Diesel		Petrol	Diesel
Less than 121	10%	13%	185 to 189	25%	28%
121 to 139	15%	18%	190 to 194	26%	29%
140 to 144	16%	19%	195 to 199	27%	30%
145 to 149	17%	20%	200 to 204	28%	31%
150 to 154	18%	21%	205 to 209	29%	32%
155 to 159	19%	22%	210 to 214	30%	33%
160 to 164	20%	23%	215 to 219	31%	34%
165 to 169	21%	24%	220 to 224	32%	35%
170 to 174	22%	25%	225 to 229	33%	35%
175 to 179	23%	26%	230 to 234	34%	35%
180 to 184	24%	27%	235 and over	35%	35%
* The exact CO2 figure is rounded down to the nearest 5g/km

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

• 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	VAT on 1 month charge	VAT exclusive 1 month charge
120 or less	46.00	6.85	39.15
125	69.00	10.28	58.72
130	69.00	10.28	58.72
135	69.00	10.28	58.72
140	73.00	10.87	62.13
145	78.00	11.62	66.38
150	82.00	12.21	69.79
155	87.00	12.96	74.04
160	92.00	13.70	78.30
165	96.00	14.30	81.70
170	101.00	15.04	85.96
175	105.00	15.64	89.36
180	110.00	16.38	93.62
185	115.00	17.13	97.87
190	119.00	17.72	101.28
195	124.00	18.47	105.53
200	128.00	19.06	108.94
205	133.00	19.81	113.19
210	138.00	20.55	117.45
215	142.00	21.15	120.85
220	147.00	21.89	125.11
225	151.00	22.49	128.51
230	156.00	23.23	132.77
235 or more	161.00	23.98	137.02

VAT fuel scale charges for 3 month periods

CO2 band	VAT fuel scale charge 3 month period £	VAT on 3 month charge £	VAT exclusive 3 month charge £
120 or less	138.00	20.55	117.45
125	207.00	30.83	176.17
130	207.00	30.83	176.17
135	207.00	30.83	176.17
140	221.00	32.91	188.09
145	234.00	34.85	199.15
150	248.00	36.94	211.06
155	262.00	39.02	222.98
160	276.00	41.11	234.89
165	290.00	43.19	246.81
170	303.00	45.13	257.87
175	317.00	47.21	269.79
180	331.00	49.30	281.70
185	345.00	51.38	293.62
190	359.00	53.47	305.53
195	373.00	55.55	317.45
200	386.00	57.49	328.51
205	400.00	59.57	340.43
210	414.00	61.66	352.34
215	428.00	63.74	364.26
220	442.00	65.83	376.17
225	455.00	67.77	387.23
230	469.00	69.85	399.15
235 or more	483.00	71.94	411.06

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VAT fuel scale charges for 12 month periods

CO2 band	VAT fuel scale charge 12 month period £	VAT on 12 month charge £	VAT exclusive 12 month charge £
120 or less	555.00	82.66	472.34
125	830.00	123.62	706.38
130	830.00	123.62	706.38
135	830.00	123.62	706.38
140	885.00	131.81	753.19
145	940.00	140.00	800.00
150	995.00	148.19	846.81
155	1,050.00	156.38	893.62
160	1,105.00	164.57	940.43
165	1,160.00	172.77	987.23
170	1,215.00	180.96	1,034.04
175	1,270.00	189.15	1,080.85
180	1,325.00	197.34	1,127.66
185	1,380.00	205.53	1,174.47
190	1,435.00	213.72	1,221.28
195	1,490.00	221.91	1,268.09
200	1,545.00	230.11	1,314.89
205	1,605.00	239.04	1,365.96
210	1,660.00	247.23	1,412.77
215	1,715.00	255.43	1,459.57
220	1,770.00	263.62	1,506.38
225	1,825.00	271.81	1,553.19
230	1,880.00	280.00	1,600.00
235 or more	1,935.00	288.19	1,646.81

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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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