Benefits in kind rates
This article describes various rates and calculation methods associated with benefits in kind.
Car fuel benefit rates
From 2003/04 the fuel benefit will be calculated by multiplying the percentage used to calculate your car benefit by a set figure. For 2003/04 onwards the set figure is £14,400.
e.g. if car benefit percentage is 23%, the fuel benefit would be £14,400 x 23% = £3,312.
| Fuel type | Engine size | 2002/2003 (£) | 2001/2002 (£) |
|---|---|---|---|
| Petrol | 1,400cc or less | 2,240 | 1,930 |
| 1,401cc to 2,000cc | 2,850 | 2,460 | |
| 2,001cc or more | 4,200 | 3,620 | |
| Diesel | 2,000cc or less | 2,850 | 2,460 |
| 2,001cc or more | 4,200 | 3,620 | |
| Cars with no cylinder capacity | 4,200 | 3,620 | |
Car benefit rates (from 6 April 2002)
From 6 April 2002, company cars will be taxed on a percentage of their price, which will vary according to the level of their carbon dioxide emissions, measured in grams per kilometre.
- A minimum charge of 15% will apply to cars emitting CO2 at or below specified levels, measured in g/km. This builds up in 1% steps for every additional 5g/km up to a maximum charge of 35%.
- A 3% supplement will be added to diesel cars (up to the maximum charge of 35%).
- Cars without an approved figure of CO2 emissions will be taxed according to their engine size.
- Certain cleaner, alternatively fuelled cars could see their charge reduced to below the minimum of 15%.
- There will be no adjustment for business mileage or for older cars.
Car benefit rates (to 5 April 2002)
Until 5 April 2002, your company car benefit will be calculated using the following rules.
Initial benefit is 35% of the list price of your car. This is reduced by up to £5,000 by any capital contribution made. The list price is capped at £80,000.
Reductions are made to the benefit where business mileage is:
- between 2,500 and 18,000 miles (reduced to 25%)
- over 18,000 miles (reduced to 15%)
A further reduction of 25% is made where the car is over four years old at the end of the tax year (5th April).
Private use contributions made by the employee will reduce the benefit in kind charge on a pound for pound basis.
Advisory fuel rates for company cars
Non-statutory rates can be used by an employer to:
- reimburse employees for fuel used for business miles travelled in the company car, or
- charge employees for fuel used for private miles travelled in the company car where the employer has provided fuel and wishes to avoid the fuel scales.
The rates accepted by HM Revenue & Customs for cars up to 3,000cc are:
| Engine size | Petrol | Diesel | LPG | |
|---|---|---|---|---|
| all years | to 2003/04 | from 2004/05 | ||
| 1,400cc or less | 10p | 9p | 6p | 7p |
| 1,401cc to 2,000cc | 12p | 9p | 7p | 8p |
| 2,001cc or more | 14p | 12p | 9p | 10p |
This page was last reviewed on 03 April 2006. The information may not reflect changes in legislation made after this date.
This is only a guide to your tax position and should not be relied on in place of professional accounting or tax advice. Any calculated figures are illustrative and are based on the data you provided.
