The amount of the car benefit chargeable to tax and liable for Class 1A NICs when a car is made available for the whole of a tax year is calculated by multiplying two figures, the:

• price of the car and accessories for the tax year
• appropriate percentage, which is normally based on the car's carbon dioxide (CO2) emissions.

The result is the benefit charge for that car for a full tax year.

Reductions from the charge for the full year

There are reductions from the charge where the:

• car is unavailable for part of the year
• employee makes capital contributions to the cost of the car or accessories
• employee makes payments for private use
• car is shared.

Level 3 Table of Contents