Car benefit charge
Written by Ray Coman
Car Benefit Charge 2019-20
|Co2 Emissions g/km||Petrol Engine %||Diesel Engines %|
|50 or less||16||20|
|180 and above||37||37|
Van benefit charge
|Van benefit charge||£3,430||£3,350|
Fuel Benefit charge
|Car Fuel Benefit Charge Multiplier||£24,100||£23,400|
|Van Fuel Benefit Charge Multiplier||£655||£633|
The benefit of a car provided for the private use of an employee is a percentage of the car's list price when new.
The actual price paid which may include discounts is not taken into account. The list price includes delivery charges, standard accessories, VAT and any customs duties. Where accessories are fitted after the car is made available, the cost of the accessories is added to the list price of the car, if they cost more than £100.
A contribution of up to £5,000 made by the employee towards the capital cost of the car is deductible for the list price for the benefit calculation.
If a car is over 15 years old and has a market value above £15,000, the market value will be used if higher than the original list price.
The percentage used to calculate the car benefit depends only on the carbon dioxide emissions of the car, according to the table above. Cars that use diesel fuel are subject to a 3% supplement.
Where a car is unavailable for private use for more than 30 consecutive days, the taxable benefit is reduced accordingly. A contribution made by the employee for the private use of the car will be deducted from the value of the benefit.
The use of a pool car is tax free. A car only qualifies as a pool car for a year if all the following conditions are satisfied in that year.
- It is actually used by more than one director or employee and is not ordinarily used by any one of them to the exclusion of the others.
- Any private use is merely incidental to business use, and
- It is not normally kept overnight at or near the residence of any director or employee.
The charge for the provision of fuel for private purposes is the percentage used in calculating the car benefit multiplied by the multiplier in the above table. No charge applies for electrically propelled cars. If the provision of private fuel is withdrawn during the year, the fuel charge may be pro rated. Contributions by the employee for private fuel cannot be deducted from the charge, unless they are required to (and do) fully cover the cost of the fuel. In this case there is no benefit.
An annual charge in the above table applies for private use of company vans, except for commuting and incidental private use. A further charge, as per the above table applies for the provision of private fuel, reduced by employee contributions.