Budget 2008: Company Cars

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Budget 2008: Company Cars

Capital allowances

Motor cars
On reducing balance (max. £3,000 p.a. per car)	20%
Cars emitting not more than 110g/km C0₂ registered 17 April 2002 - 31 March 2013 See notes below	100%

Note:

Any leasing contracts entered into before 1 April 2008
Involving cars with an emission of not more than 120g/km C0₂
will qualify for the 100% deduction.
There is no £12,000 restriction for these cars.

Car benefit

A new lower rate of 10% (13% for diesels) of the list price for cars with C0₂ emissions of 120 grams per kilometre or less will have effect on 6 April 2008.

From 6 April 2008 the emissions level that will qualify a car for a benefit of 15% of the list price reduces to 135g/km C0₂. On 6 April 2010 the level reduces again to 130g/km C0₂.

The threshold C0₂ emissions rate is reduced to 135 g/km from 6 April 2008. The rate of the taxable benefit ranges from 10% to 35% of list price (plus certain accessories) for most petrol or diesel-powered cars.

You can find your taxable percentage of the list price for 2008/09 using the following table:

CO₂ in g/km*	Taxable %		CO₂ in g/km*	Taxable %
CO₂ in g/km*	Petrol	Diesel	CO₂ in g/km*	Petrol	Diesel
Less than 121	10%	13%	185 to 189	25%	28%
121 to 139	15%	18%	190 to 194	26%	29%
140 to 144	16%	19%	195 to 199	27%	30%
145 to 149	17%	20%	200 to 204	28%	31%
150 to 154	18%	21%	205 to 209	29%	32%
155 to 159	19%	22%	210 to 214	30%	33%
160 to 164	20%	23%	215 to 219	31%	34%
165 to 169	21%	24%	220 to 224	32%	35%
170 to 174	22%	25%	225 to 229	33%	35%
175 to 179	23%	26%	230 to 234	34%	35%
180 to 184	24%	27%	235 and over	35%	35%
* The exact CO₂ figure is rounded down to the nearest 5g/km

The discounts for lower emissions vehicles are:

2% for bi-fuel lpg and petrol cars manufactured or converted before type approval
2% for cars able to run on E85 fuel (type G cars)
3% for hybrid electric and petrol cars
6% for electric-only cars.

Car fuel benefit

The multiplier for car fuel benefit has increased to £16,900.

Car and fuel benefit calculation

The amount chargeable to income tax (user) and Class 1A national insurance contributions (employer) for 2008/09 is calculated by multiplying list price (car benefit) or the fuel multiplier (fuel benefit) by a percentage based on the rate at which the car emits carbon dioxide (CO₂ in g/km) (see table above).

Take a car with a list price of £18,000 when it was first registered (say 31 March 2008) and which emits carbon dioxide at a rate of 176 g/km.

Car benefit	Petrol	Diesel
List price	£18,000	£18,000
Taxable percentage	23%	26%
Taxable benefit	£4,140	£4,680
Tax (20% taxpayer)	£828	£936
Tax (40% taxpayer)	£1,656	£1,872
Employer’s Class 1A NIC	£530	£599

Fuel benefit	Petrol	Diesel
Multiplier	£16,900	£16,900
Taxable percentage	23%	26%
Taxable benefit	£3,887	£4,394
Tax (20% taxpayer)	£777.40	£878.80
Tax (40% taxpayer)	£1,554.80	£1,757.60
Employer’s Class 1A NIC	£497.54	£562.43

VAT fuel scale charges

VAT fuel scale charges for 1 month period

CO₂ band g/km	VAT fuel scale charge 1 month period	VAT on 1 month charge	VAT exclusive 1 month charge
120 or less	46.00	6.85	39.15
125	69.00	10.28	58.72
130	69.00	10.28	58.72
135	69.00	10.28	58.72
140	73.00	10.87	62.13
145	78.00	11.62	66.38
150	82.00	12.21	69.79
155	87.00	12.96	74.04
160	92.00	13.70	78.30
165	96.00	14.30	81.70
170	101.00	15.04	85.96
175	105.00	15.64	89.36
180	110.00	16.38	93.62
185	115.00	17.13	97.87
190	119.00	17.72	101.28
195	124.00	18.47	105.53
200	128.00	19.06	108.94
205	133.00	19.81	113.19
210	138.00	20.55	117.45
215	142.00	21.15	120.85
220	147.00	21.89	125.11
225	151.00	22.49	128.51
230	156.00	23.23	132.77
235 or more	161.00	23.98	137.02

VAT fuel scale charges for 3 month periods

CO₂ band	VAT fuel scale charge 3 month period £	VAT on 3 month charge £	VAT exclusive 3 month charge £
120 or less	138.00	20.55	117.45
125	207.00	30.83	176.17
130	207.00	30.83	176.17
135	207.00	30.83	176.17
140	221.00	32.91	188.09
145	234.00	34.85	199.15
150	248.00	36.94	211.06
155	262.00	39.02	222.98
160	276.00	41.11	234.89
165	290.00	43.19	246.81
170	303.00	45.13	257.87
175	317.00	47.21	269.79
180	331.00	49.30	281.70
185	345.00	51.38	293.62
190	359.00	53.47	305.53
195	373.00	55.55	317.45
200	386.00	57.49	328.51
205	400.00	59.57	340.43
210	414.00	61.66	352.34
215	428.00	63.74	364.26
220	442.00	65.83	376.17
225	455.00	67.77	387.23
230	469.00	69.85	399.15
235 or more	483.00	71.94	411.06

VAT fuel scale charges for 12 month periods

CO₂ band	VAT fuel scale charge 12 month period £	VAT on 12 month charge £	VAT exclusive 12 month charge £
120 or less	555.00	82.66	472.34
125	830.00	123.62	706.38
130	830.00	123.62	706.38
135	830.00	123.62	706.38
140	885.00	131.81	753.19
145	940.00	140.00	800.00
150	995.00	148.19	846.81
155	1,050.00	156.38	893.62
160	1,105.00	164.57	940.43
165	1,160.00	172.77	987.23
170	1,215.00	180.96	1,034.04
175	1,270.00	189.15	1,080.85
180	1,325.00	197.34	1,127.66
185	1,380.00	205.53	1,174.47
190	1,435.00	213.72	1,221.28
195	1,490.00	221.91	1,268.09
200	1,545.00	230.11	1,314.89
205	1,605.00	239.04	1,365.96
210	1,660.00	247.23	1,412.77
215	1,715.00	255.43	1,459.57
220	1,770.00	263.62	1,506.38
225	1,825.00	271.81	1,553.19
230	1,880.00	280.00	1,600.00
235 or more	1,935.00	288.19	1,646.81