Home > > 12 March 2008 Budget Report > Company Cars

Company Cars

Capital allowances

Motor cars
On reducing balance (max. £3,000 p.a. per car) 20%
New cars emitting not more than 110g/km CO2
registered 17 April 2002 - 31 March 2013
See notes below		 100%

Note;

  1. Any leasing contracts entered into before 1 April 2008
    Involving cars with an emission of not more than 120g/km CO2
    will qualify for the 100% deduction.
  2. There is no £12,000 restriction for these cars.

Car benefit

A new lower rate of 10% (13% for diesels) of the list price for cars with CO2 emissions of 120 grams per kilometre or less will have effect on 6 April 2008.

From 6 April 2008 the emissions level that will qualify a car for a benefit of 15% of the list price reduces to 135g/km CO2. On 6 April 2010 the level reduces again to 130g/km CO2.

The threshold CO2 emissions rate is reduced to 135 g/km from 6 April 2008. The rate of the taxable benefit ranges from 10% 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 2008/09 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

The discounts for lower emissions vehicles are:

  • 2% for bi-fuel lpg and petrol cars manufactured or converted before type approval
  • 2% for cars able to run on E85 fuel (type G cars)
  • 3% for hybrid electric and petrol cars
  • 6% for electric-only cars.
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Car fuel benefit

The multiplier for car fuel benefit has increased to £16,900.

Car and fuel benefit calculation

The amount chargeable to income tax (user) and Class 1A national insurance contributions (employer) for 2008/09 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 2008) and which emits carbon dioxide at a rate of 176 g/km.

Car benefit Petrol Diesel
List price £18,000 £18,000
Taxable percentage 23% 26%
Taxable benefit £4,140 £4,680
Tax (20% taxpayer) £828 £936
Tax (40% taxpayer) £1,656 £1,872
Employer’s Class 1A NIC £530 £599


Fuel benefit Petrol Diesel
Multiplier £16,900 £16,900
Taxable percentage 23% 26%
Taxable benefit £3,887 £4,394
Tax (20% taxpayer) £777.40 £878.80
Tax (40% taxpayer) £1,554.80 £1,757.60
Employer’s Class 1A NIC £497.54 £562.43
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VAT fuel scale charges

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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