Home > > 2008/09 Rates and Allowances > Vehicle Benefits
Chargeable on employees earning £8,500 or over (including benefits), and directors.
From 6 April 2008 the fuel benefit charge multiplier (FBC) increases to £16,900 (currently £14,400). In future the FBC multiplier will increase at least in line with inflation.
This will increase the tax cost by up to £350 and a liability to Class 1A national insurance of up to £112.
The tax you pay on your company car is governed by five factors:
You can find your taxable percentage for 2008/09 using the following 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 | |||||
How to find out how much CO2 your company car emits – see:
Reliable emissions data is not widely available for cars registered before 1 January 1998. For them, the following taxable percentages apply, regardless of fuel type:
| Engine capacity | Taxable % |
| Up to 1400cc | 15% |
| 1401 - 2000cc | 22% |
| Over 2000cc | 32% |
If the employee pays for the full cost of all fuel for private journeys (usually including home to work) there will be no car fuel benefit. In all other cases the full tax charge will be due.
The taxable car fuel benefit, for 2008/09, is calculated by multiplying £16,900 by the same percentage as applies (or would apply) for the car benefit.
Example: A company car driver has a car which, on the day before it was first registered, had a list price of £18,000. It runs on petrol, and emits 172 g/km of CO2.
If we assume the driver pays tax at 40%, the annual tax bill on the car is: £18,000 x 23% x 40% = £1,656
If the employer provides any fuel used for private journeys and is not re-imbursed for the cost, the 2008/09 tax bill for the fuel is: £16,900 x 23% x 40% = £1,554.80.
The taxable benefit for the unrestricted use of company vans is £3,000 (with no reduction for older vans) plus a further £500 of taxable benefit if fuel is provided by the employer for private travel.
The maximum tax payable on the use of a company van is £1,400 p.a., and the employer's Class1A NIC payable is £448 p.a.