Vehicles

Car Benefit

The car benefit is calculated by multiplying the car’s list price, when new, by a percentage linked to the car’s CO2 emissions.

For diesel cars generally add a 4% supplement (unless the car is registered on or after 1 September 2017 and meets the Euro 6d emissions standard).

The overall maximum percentage is capped at 37%.

The list price includes accessories.

The list price is reduced for capital contributions made by the employee up to £5,000.

Special rules may apply to cars provided for disabled employees.

CO2 emissions (gm/km)% of car’s price taxed
02
 
1-50: Electric range >1302
1-50: Electric range 70-1295
1-50: Electric range 40-698
1-50: Electric range 30-3912
1-50: Electric range <3014
 
51-5415
55-5916
60-6417
65-6918
70-7419
75-7920
80-8421
85-8922
90-9423
95-9924
100-10425
105-10926
110-11427
115-11928
120-12429
125-12930
130-13431
135-13932
140-14433
145-14934
150-15435
155-15936
160 and above37

Car Fuel Benefit

Car fuel benefit applies if an employee has the benefit of private fuel for a company car.

The benefit is calculated by applying the percentage used to calculate the car benefit by a ‘fuel charge multiplier’.

The charge is proportionately reduced if provision of private fuel ceases part way through the year. The fuel benefit is reduced to nil only if the employee pays for all private fuel.

Fuel charge multiplier: £27,800 (2022/23: £25,300)

Van Benefit

Van benefit is chargeable if the van is available for an employee’s private use.

A fuel benefit may also be chargeable if an employee has the benefit of private fuel paid for in respect of a company van.

The charges do not apply to vans if a ‘restricted private use condition’ is met throughout the year.

A reduced benefit charge may apply to vans which cannot emit CO2 when driven.

Van benefit: £3,960 (2022/23: £3,600)

Fuel benefit: £757 (2022/23: £688)

Advisory Fuel Rates for Company Cars

Advisory rates only apply where employers reimburse employees for business travel in a company car or require employees to repay the cost of fuel used for private travel in a company car.

If the rate paid per mile of business travel is no higher than the advisory rate for the particular engine size and fuel type of the car, HMRC will accept that there is no taxable profit and no Class 1 NIC liability.

From 1 September 2023:

Petrol

Engine size (cc)Pence per mile
1400 or less13
1401 to 200016
Over 200025

Diesel

Engine size (cc)Pence per mile
1600 or less12
1601 to 200014
Over 200019

LPG

Engine size (cc)Pence per mile
1400 or less10
1401 to 200012
Over 200019

Notes…

  1. Hybrid cars are treated as either petrol or diesel cars for this purpose.
  2. The Advisory Electricity Rate for fully electric cars is increased from 8p to 9p per mile. Electricity is not a fuel for car fuel benefit purposes.

Mileage Allowance Payments (MAPs) for employees

MAPs represent the maximum tax free mileage allowances an employee can receive from their employer for using their own vehicle for business journeys.

An employer is allowed to pay an employee a certain amount of MAPs each year without having to report payments to HMRC.

If the employee receives less than the statutory rate, tax relief can be claimed on the difference.

2023/24 and 2022/23:

Vehicle typePence per mile
Cars and vans– up to 10,000 miles45
– over 10,000 miles25
Bicycles20
Motorcycles24