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Car benefit charge

Cars registered before 6 April 2020 — from 6 April 2020

Appropriate percentage for calculating the taxable benefit of petrol, hybrid, electric, bi-fuel and other alternatively fuelled company cars.

CO₂ emissions Zero emission range 2020/21 2021/22 2022/23
g/km Miles % % %
0 0 1 2
1 – 50 130 and above 2 2 2
70 – 129 5 5 5
40 – 69 8 8 8
30 – 39 12 12 12
Under 30 14 14 14
51 – 54 15 15 15
55 – 59 16 16 16
60 – 64 17 17 17
65 – 69 18 18 18
70 – 74 19 19 19
75 – 79 20 20 20
80 – 84 21 21 21
85 – 89 22 22 22
90 – 94 23 23 23
95 – 99 24 24 24
100 – 104 25 25 25
105 – 109 26 26 26
110 – 114 27 27 27
115 – 119 28 28 28
120 – 124 29 29 29
125 – 129 30 30 30
130 – 134 31 31 31
135 – 139 32 32 32
140 – 144 33 33 33
145 – 149 34 34 34
150 – 154 35 35 35
155 – 159 36 36 36
160 and above 37 37 37

From 6 April 2018 all cars propelled solely by diesel are subject to a 4% supplement unless they meet the Real Driving Emissions Step 2 (RDE2) standard. However, the maximum appropriate percentage cannot exceed 37%.

Under the legislation governing Optional Remuneration Arrangements, for agreements made from 6 April 2017 if a cash allowance is offered but a company car is selected, should the CO₂ emissions of the company car exceed 75 g/km, the car benefit charge will be the greater of the annual cash allowance and the cash equivalent of the company car. When calculating the cash equivalent to be compared against the cash allowance employee contributions should be ignored.

Similar rules apply for salary sacrifice, where the amount of salary sacrifice would be compared against the cash equivalent of the company car.

The government is carrying out a review to consider the impact of the Worldwide harmonised Light vehicles Test Procedure (WLTP) on company car tax for cars first registered from April 2020 onwards. Although the government believes that the fundamental structure of company car tax is appropriate, if changes to the company car tax regime are required it is proposed these would be included in Finance Bill 2019 - 20, with draft legislation being published for technical consultation prior to the publication of the Finance Bill.