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CLIENTS page
CLIENTS page
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Benefit in kind - CO2 bands by tax year | |||||
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Emissions CO2 g/km |
Electric range in miles |
Electric Petrol Petrol Hybrid |
Electric Petrol Petrol Hybrid | ||
|
2023/ 2024 |
2024/ 2025 |
2025/ 2026 |
2026/ 2027 | ||
|
0 (electric) |
N/a |
2% |
2% |
3% |
4% |
|
1-50 |
>130 |
2% |
2% |
3% |
4% |
|
1-50 |
70-129 |
5% |
5% |
6% |
7% |
|
1-50 |
40-69 |
8% |
8% |
9% |
10% |
|
1-50 |
30-39 |
12% |
12% |
13% |
14% |
|
1-50 |
<30 |
14% |
14% |
15% |
16% |
|
51-54 |
|
15% |
15% |
16% |
17% |
|
55-59 |
|
16% |
16% |
17% |
18% |
|
60-64 |
|
17% |
17% |
18% |
19% |
|
65-69 |
|
18% |
18% |
19% |
20% |
|
70-74 |
|
19% |
19% |
20% |
21% |
|
75-79 |
|
20% |
20% |
21% |
21% |
|
80-84 |
|
21% |
21% |
22% |
22% |
|
85-89 |
|
22% |
22% |
23% |
23% |
|
90-94 |
|
23% |
23% |
24% |
24% |
|
95-99 |
|
24% |
24% |
25% |
25% |
|
100-104 |
|
25% |
25% |
26% |
26% |
|
105-109 |
|
26% |
26% |
27% |
27% |
|
110-114 |
|
27% |
27% |
28% |
28% |
|
115-119 |
|
28% |
28% |
29% |
29% |
|
120-124 |
|
29% |
29% |
30% |
30% |
|
125-129 |
|
30% |
30% |
31% |
31% |
|
130-134 |
|
31% |
31% |
32% |
32% |
|
135-139 |
|
32% |
32% |
33% |
33% |
|
140-144 |
|
33% |
33% |
34% |
34% |
|
145-149 |
|
34% |
34% |
35% |
35% |
|
150-154 |
|
35% |
35% |
36% |
36% |
|
155-159 |
|
36% |
36% |
37% |
37% |
|
160 or more |
|
37% |
37% |
37% |
37% |
|
1. Diesel cars suffer a 4% surcharge to the above rates (maximum 37%). The diesel surcharge does not apply to cars that meet the Real Driving Emissions 2 conditions OR to diesel hybrids. 2. From 2020/21 BIK car tax bands for electric vehicles and hybrids emitting less than 50 g/km CO2 will be taxed based on how far a vehicle can travel on electric power. 3. For cars registered after 5.4.2020, the CO2 emissions figures will be based on the new more realistic (higher CO2) WLTP test procedures rather than the old NEDC test. | |||||
Company cars and tax
Most employees/directors provided with a company car are taxed on them as a benefit in kind.
Employee tax - Car benefit
The car benefit is based on a car’s list price, its CO2 emissions and how far it can travel on electric power alone from 2020/21.
List price - this is the price published by the manufacturer and includes the list price of accessories fitted on delivery (and accessories fitted later if more than £100). It includes delivery charges, tax and VAT, but not RFL or first car registration fee.
CO2 emissions - this figure is obtained from the V5 registration document or visit VCA - www.vca.gov.uk
To work out the benefit, use the table below as a guide.
For example, suppose you are provided with a company car -
2018 BMW 330e PHEV(hybrid) 2.0 M Sport Auto 4 door saloon. CO2 emissions = 49 g/km. List price £38,805. P11D value £38,750. Capital contribution = nil. Accessories fitted - total £1,525. Electric range <30 miles. Registered 2018.
|
Car benefit and tax calculation - 2024/25 |
example | |
|
1 |
P11D value of car |
£38,750 |
|
2 |
Add: accessories |
£1,525 |
|
3 |
Less: capital contribution |
£0 |
|
4 |
Price for car benefit = 1 + 2 - 3 |
£40,275 |
|
A |
CO2 emissions from V5 document |
49 g/km |
|
B |
Taxable % from table opposite |
14% |
|
X |
Taxable benefit = 4 x B (£40,275 x 14%) |
£5,639 |
|
Y |
Tax at 20% tax rate = £5,639 x 20% |
£1,128 per yr |
|
£94 p mth | ||
|
Z |
Tax at 40% tax rate = £5,639 x 40% |
£2,256 per yr |
|
£188 p mth | ||
Employee tax - Fuel benefit
If free fuel is provided by an employer on a company car, an employee will be taxed on the value of the benefit, unless all fuel for private journeys is reimbursed. The value of the benefit is calculated by applying the taxable % rate calculated in box B above for car benefit to an annual multiplier. For 2024/25, the annual multiplier is £27,800 (2023/24 - £27,800). In the example above, the fuel benefit for 2024/25 will be £27,800 x 14% = £3,892. Tax at 20% on this is £778 and at 40% £1,556. Is free fuel worth it?
Employer Tax - Class 1A NIC
Beside the employee being taxed, the employer will also be charged to Class 1A National Insurance on the taxable value of the car and fuel benefit. In the example above, the taxable value of car and fuel benefit totals £5,639 + £3,892 = £9,531. The NIC rate for 2024/25 is 13.80%, so the Class 1A NIC charge will be £9,531 x 13.80% = £1,315. This is payable after the tax year in July. What about VANS?
Car Benefits
