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Car benefit charge

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