| CO2 emissions and company car tax rules
Since April 2002 company car tax has been based on a car's list
price and official C02 emission figure.
Car Tax Calculations Before the April 2002 Changes
For tax years up to and including 2001/02 the taxable benefit
was based on business mileage. For 2001/02 the car benefit was:
| Taxable benefit up to
2001/02 |
Business miles in tax year |
Percentage of price of car |
less than 2,500 |
35% |
2,500 to 17,999 |
25% |
18,000 or more |
15% |
Exceptions
Special rules applied to:
- Older
cars
- Cars
without an official list price
- Cars
that are not available for the whole tax year
- Second
company cars
See Assumptions
and Exclusions or contact the Inland
Revenue for more information.
April 2002 Changes in Car Tax Calculation
The price of the car is calculated as before but the percentage
used to calculate the benefit is based on carbon dioxide (CO2)
emissions measured in grams per kilometre (g/km).
A minimum charge of 15% of the car's price will apply to cars
emitting CO2 at or below a specific level, measured in (g/km).
This charge rises in 1% increments for every 5g/km over the minimum
level (there is an upper ceiling of 35%).
Diesel cars: there is a supplement of 3% up to the maximum charge
of 35%. This supplement is waived for cars that meet the EC emissions
standard known as Euro IV. The Euro Standard is shown on the
registration document for cars first registered after 01 March
2001 and is also included in information available in The Car
buyers Guide.
The table below shows the relationship between CO2 emissions
and percentage charge before any discounts are applied. The 2005
budget included the announcement that the threshold for the minimum
percentage charge rate will be frozen at 140g/km up to, and including
2007-08.
Percentage
charge relative to CO2 emissions (before discounts) |
|
2002/03 |
2003/04 |
2004/05 |
2005/06 |
CO2 |
Petrol |
Diesel |
Petrol |
Diesel |
Petrol |
Diesel |
Petrol |
Diesel |
135 |
|
|
|
|
|
|
|
|
140 |
|
|
|
|
|
|
0.15 |
0.18 |
145 |
|
|
|
|
0.15 |
0.18 |
0.16 |
0.19 |
150 |
|
|
|
|
0.16 |
0.19 |
0.17 |
0.20 |
155 |
|
|
0.15 |
0.18 |
0.17 |
0.20 |
0.18 |
0.21 |
160 |
|
|
0.16 |
0.19 |
0.18 |
0.21 |
0.19 |
0.22 |
165 |
0.15 |
0.18 |
0.17 |
0.20 |
0.19 |
0.22 |
0.20 |
0.23 |
170 |
0.16 |
0.19 |
0.18 |
0.21 |
0.20 |
0.23 |
0.21 |
0.24 |
175 |
0.17 |
0.20 |
0.19 |
0.22 |
0.21 |
0.24 |
0.22 |
0.25 |
180 |
0.18 |
0.21 |
0.20 |
0.23 |
0.22 |
0.25 |
0.23 |
0.26 |
185 |
0.19 |
0.22 |
0.21 |
0.24 |
0.23 |
0.26 |
0.24 |
0.27 |
190 |
0.20 |
0.23 |
0.22 |
0.25 |
0.24 |
0.27 |
0.25 |
0.28 |
195 |
0.21 |
0.24 |
0.23 |
0.26 |
0.25 |
0.28 |
0.26 |
0.29 |
200 |
0.22 |
0.25 |
0.24 |
0.27 |
0.26 |
0.29 |
0.27 |
0.30 |
205 |
0.23 |
0.26 |
0.25 |
0.28 |
0.27 |
0.30 |
0.28 |
0.31 |
210 |
0.24 |
0.27 |
0.26 |
0.29 |
0.28 |
0.31 |
0.29 |
0.32 |
215 |
0.25 |
0.28 |
0.27 |
0.30 |
0.29 |
0.32 |
0.30 |
0.33 |
220 |
0.26 |
0.29 |
0.28 |
0.31 |
0.30 |
0.33 |
0.31 |
0.34 |
225 |
0.27 |
0.30 |
0.29 |
0.32 |
0.31 |
0.34 |
0.32 |
0.35 |
230 |
0.28 |
0.31 |
0.30 |
0.33 |
0.32 |
0.35 |
0.33 |
0.35 |
235 |
0.29 |
0.32 |
0.31 |
0.34 |
0.33 |
0.35 |
0.34 |
0.35 |
240 |
0.30 |
0.33 |
0.32 |
0.35 |
0.34 |
0.35 |
0.35 |
0.35 |
245 |
0.31 |
0.34 |
0.33 |
0.35 |
0.35 |
0.35 |
|
|
250 |
0.32 |
0.35 |
0.34 |
0.35 |
|
|
|
|
255 |
0.33 |
0.35 |
0.35 |
0.35 |
|
|
|
|
260 |
0.34 |
0.35 |
|
|
|
|
|
|
265 |
0.35 |
0.35 |
|
|
|
|
|
|
Notes
 Percentage
charges for 2006/07 and 2007/08 will be the same as for 2005/06.
The
discount system relating to bi-fuel and hybrid electric cars
will be simplified from April 2006 to replace the existing
provision with a 1% increase in the basic percentage discounts.
Cars
without official CO2 emissions data are taxed according to
engine size.
There are no special rules for a second company car. |
