Company Cars Benefit In Kind

My company car is due to be replaced early this year and I am keen to keep my taxable benefit as low as possible (as well, of course, as doing my bit for the environment). What are the current benefit in kind rates applicable?

1st January 2009

The taxable benefit in kind you are deemed to receive from the private use of a company vehcile is still based on the Co2 emmissions and the list price, calculated by reference to a table of percentages ranging from 15% to 30%.

Diesel cars generally have lower Co2 emissions than petrol models. They do emit particulates into the atmosphere so the overall effect on the environment is in the balance, and consequently the taxable benefit carries a 3% premium compared with petrol equivalents due to this lower emission rating.

From April 2008, a special rate of benefit in kind applies for Qualifying Low Emissions Cars (QUALECs). These cars have CO2 emmissions of 120 g/km or less. If you receive private use of one of these vehicles your taxable benefit is calculated at 10% of the list price, compared to 15% for cars upto 130 g/km. Note however, the 3% supplement for diesel cars will still apply. A useful list of QUALECS is available from

Cars that run on alternative fuels can also reduce the benefit in kind, and reductions apply to models which run solely on gas (2%) and electric (6%). Hybrid cars receive a 3% reduction.

By Jo Nockels

Disclaimer: The information provided is based on current guidance (at date of publication) from HMRC and may be subject to change. Any advice shared here is intended to inform rather than advise. Taxpayer's circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this information, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.

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