RRG Group - New and Used Motor Car Sales Dealerships in Manchester and the North West

Company Car Tax

You will pay tax if a company car is made available to you for your private use (this includes commuting) or you are provided with free or subsidised fuel for private use in that car. The tax you pay is broadly determined by three factors:

  • the list price of the car plus any accessories
  • the CO2 emissions of the car, and
  • the fuel type of the car.

In general, the benefit charge is lower for cleaner and cheaper cars. This is to encourage you and your employer to choose cars which are less damaging to the environment.

The car benefit charge for a full year is obtained by multiplying the price of the car for tax purposes (in most cases, its list price plus accessories less capital contributions) by the \'appropriate percentage\'.

The appropriate percentage is based on the car\'s approved CO2 emissions figure. There are some supplements and reductions to take account of different fuels.

The rules governing the calculation of the appropriate percentage change in three ways with effect from 2008/09.

  • The lower threshold, the CO2 emissions figure which determines the appropriate percentage for all cars, is reduced from 140 to 135.
  • A new \'10 percent band\' is introduced for cars with a CO2 emissions figure of exactly 120 g/km or lower, the normal rounding does not apply to this figure. They are called \'qualifying low emissions cars\' in the legislation, QUALECs for short. Diesel adjustments apply to QUALECs as to all others, but that is all; no other reduction which is available on other cars applies to QUALECs. As a result, the only acceptable figures for the appropriate percentage for QUALECs are 13 percent - cars to which the diesel supplement applies, and 10 percent - all other cars. So there is no misunderstanding, electric-only cars are excluded from these arrangements and retain their net appropriate percentage of 9 percent.
  • There is a new 2 percent reduction for cars manufactured to be able to run on E85 fuel, a mixture of 85 percent bio-ethanol and 15 percent unleaded petrol. They will be known as type G on forms P46 (car) and P11D. Other cars cannot run on this mixture without damaging the engine.

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