Chargeable on employees earning £8,500 or over (including benefits) and directors.

Car Benefits 2016 / 17

Summary
Minimum
16% of list price (emission levels 95g/km CO2) (lower rates where emissions below this level)
Increments
1% for each additional 5g/km CO2 emissions over 95g/km CO2
Diesel cars
3% surcharge
Electric cars
7% of list price
Maximum
37% of list price

See table below or visit www.vca.gov.uk to check the car emission levels
CO2 levels are rounded down to the nearest 5g


If no emissions rating available
Reliable emissions data is not widely available - particularly for cars registered before 1 January 1998. For these the following taxable percentages apply, regardless of fuel type:

Engine size:
Registered before 01/01/1998
Registered after 01/01/1998
1,400 cc or less
15%
15%
1,401-2,000 cc
22%
25%
over 2,000 cc
32%
35%


Car Fuel Benefits

Provision of fuel for company cars

.
2015 / 16
2016 / 17
The company car percentage is multiplied by
£22,100
£22,200

Percentage used to calculate the taxable benefit of the car for which the fuel is provided.
The charge does not apply for certain environmentally friendly cars.
The charge is proportionately reduced if provision for private fuel ceases part of way through the year. The fuel benefit is reduced to nil only if the employee pays for all private fuel.


VAT on fuel benefits

Where businesses wish to reclaim the input VAT on fuel which has some degree of private use, they must account for output VAT for which they may use the flat rate valuation charge.

The table shows the VAT chargeable for quarters commencing on or after 1 May 2015. Please check with us for any updated rates from 1st May 2016.

CO2 emissions
Appropriate percentage
Quarterly VAT
(g/km)
Petrol %
Diesel %
Fuel scale charge (£)
VAT element (20%)
0 - 50
7
10
133
22.17
51 - 75
11
14
133
22.17
76 - 94
15
18
133
22.17
95 - 99
16
19
133
22.17
100 - 104
17
20
133
22.17
105 - 109
18
21
133
22.17
110 - 114
19
22
133
22.17
115 - 119
20
23
133
22.17
120 - 124
21
24
133
22.17
125 - 129
22
25
200
33.33
130 – 134
23
26
213
35.50
135 – 139
24
27
227
37.83
140 – 144
25
28
240
40.00
145 – 149
26
29
254
42.33
150 – 154
27
30
267
44.50
155 – 159
28
31
281
46.83
160 – 164
29
32
294
49.00
165 – 169
30
33
308
51.33
170 – 174
31
34
320
53.33
175 – 179
32
35
334
55.67
180 – 184
33
36
347
57.83
185 – 189
34
37
361
60.17
190 – 194
35
37
374
62.33
195 – 199
36
37
388
64.67
200 – 204
37
37
401
66.83
205 – 209
37
37
425
69.17
210 – 214
37
37
428
71.33
215 – 219
37
37
441
73.50
220 – 224
37
37
455
75.83
225 and above
37
37
468
78.00


Future changes

From April 2016, all the appropriate percentages will be increased by 2% up to the maximum of 37%. In addition, new European standards which come into force in September 2015 require diesel cars to have the same air quality emissions as petrol cars. The 3% diesel supplement will therefore be removed in April 2016, so that diesel cars will then be subject to the same level of tax as petrol cars.

The appropriate percentage will increase by 2% for cars emitting more than 75 g/km to a maximum of 37% in each of years 2017/18 and 2018/19.


Advisory mileage rates for business mileage in company cars
(From 1 March 2016)

Engine size:
Petrol
LPG
Engine size:
Diesel
1,400 cc or less
10p
7p
1,600 cc or less
8p
1,401-2,000 cc
12p
8p
1,601-2,000 cc
10p
over 2,000 cc
19p
13p
over 2,001 cc
11p
Petrol hybrid cars are treated as petrol cars for this purpose


Approved mileage rates for business mileage in own car
(2011/12 onwards)
Car and vans
Per mile
0 - 10,000 miles
45p
Over 10,000 miles
25p
Bicycles
20p
Motorcycles
24p
Each passenger in car and vans only - same trip
5p

These rates represent the maximum tax free mileage allowances for employees using their own vehicle for business. If employees receive less than the statutory rate, tax relief can be claimed on the difference.


Company Vans

The taxable benefit for the unrestricted private use of vans is £3,170. There is a further £598 taxable benefit if the employer provides fuel for private travel.

Van & Fuel Charges
Van
Fuel
Total
Tax (20% taxpayer)
£634.00
£119.60
£753.60
Tax (40% taxpayer)
£1,268.00
£239.20
£1,507.20
Tax (45% taxpayer)
£1,426.50
£269.10
£1,695.60
Employer's Class 1A NICs
£437.46
£82.52
£519.98

As previously announced, the van benefit for zero emission vans is to be increased on a tapered basis so that there will be a single van benefit charge applying to all vans by April 2020. For 2016/17 the charge will be 20% of the value of the standard van benefit charge (i.e. £634). There is no fuel benefit for such vans.


Car Costs - Vehicle Excise Duty (VED) Rates


VED ('Car Tax') rates also reflect emissions with lower scale rates for cars using alternative fuels.

The following table shows rates which apply from 1st April 2016 for cars registered on or after 1st March 2001.

VED Band
CO2 Emissions (g/km)
First Year Rate
Standard Rates
Petrol & Diesel
Alternative Fuels
A
up to 100
£0
£0
£0
B
101 - 110
£0
£20
£10
C
111 - 120
£0
£30
£20
D
121 - 130
£0
£110
£100
E
131 - 140
£130
£130
£120
F
141 - 150
£145
£145
£135
G
151 - 165
£185
£185
£175
H
166 - 175
£300
£210
£200
I
176 - 185
£355
£230
£220
J
186 - 200
£500
£270
£260
K *
201 - 225
£650
£295
£285
L
226 - 255
£885
£500
£490
M
Over 255
£1,120
£515
£505
* Includes cars emitting over 225 g/km registered before 23 March 2006


Plug In Grants

Motorists (private or business) purchasing new qualifying ultra-low emission cars can receive a grant of 25% towards the cost of the vehicle, up to a maximum of £5,000. The scheme also covers new qualifying ultra-low emission vans, where the available grant will be 20% towards the cost of the vehicle, up to a maximum of £8,000. Vehicles with CO2 emissions of 75g/km or less, including electric, plug-in hybrid and hydrogen-fuelled cars, are all potentially eligible for the subsidy. There are strict criteria to be met before specific vehicles can be confirmed as eligible under the rules of the scheme
.