Forthcoming changes to the car benefit rules

The car benefit charge for a full year is obtained by multiplying the price of the car for tax purposes (in most cases, its list price plus accessories, less capital contributions) by the 'appropriate percentage'. A more detailed guide is available for employees in the HS203 Self Assessment helpsheet (PDF 88K) and for employers in booklet 480 (PDF 368K).

This page records changes to the car benefit rules which take effect from 2010-11 onwards. It will be updated as soon as possible after any further announcements are made.

Changes from 2011-12

The car benefit rules have been simplified for 2011-12 onwards.

From 6 April 2011:

  • there will be three letters to describe cars: E for electric only cars (as before), D for all diesels (previously types D and L) and A for all other types (previously types H, B, C, G and P)
  • there will no longer be any reductions for alternative fuels
  • the diesel surcharge will apply to all diesels, whenever registered
  • the £80,000 limit for the price of a car for car benefit purposes will no longer apply
  • the lower threshold (the CO2 emissions figure which sets the 15 per cent rate) will be educed from 130g/km to 125g/km
  • the lowest appropriate percentage is 0 per cent and applies to cars with CO2 emissions of zero
  • cars with CO2 emissions of less than 75g/km have an appropriate percentage of 5 per cent
  • cars with CO2 emissions of 76g/km to 120g/km have an appropriate percentage of 10 per cent and thereafter the rate is 15 per cent increasing by 1 per cent for every 5 g/km to the current maximum of 35 per cent (emissions of 225g/km and above)

The fuel benefit multiplier is increased from £18,000 to £18,800.

Changes from 2012-13

The special rules for QUALECs (qualifying low emissions cars, those with CO2 emissions not exceeding exactly 120g/km) will be abolished.

The lower threshold (the CO2 emissions figure which sets the 15 per cent rate) will be reduced from 125g/km to 120g/km.

The lowest appropriate percentages are still 0 per cent and 5 per cent but 10 per cent will only apply to cars up to an emission level of 99g/km. From 100g/km the rate is11 per cent and rises by 1 per cent for every 5g/km to the current maximum of 35 per cent (emissions of 220g/km).

Changes from 2013-14

The lower threshold will be reduced from 120g/km to 115g/km.

The lowest appropriate percentages are still 0 per cent and 5 per cent. 10 per cent will now apply to cars with CO2 emissions of 76g/km to 94g/km.

The appropriate percentage will increase by 1 per cent for all vehicles with CO2 emissions between 95g/km and 215g/km, to a maximum of 35 per cent.

Changes from 2015-16

The appropriate percentage for zero emission cars reverts to 9 per cent unless this figure is changed in any future announcement.

The special rules for cars with CO2 emissions not exceeding exactly 75g/km will be abolished.