EIM23435 - Car benefit: electric cars (type E)

Sections 140 and 142 ITEPA 2003 and Regulation 4 of The Income Tax (Car Benefits) (Reduction of Value of Appropriate Percentage) Regulations 2001, SI 2001 No. 1123, as amended

This page relates to step 5 of the method statement in Section 121(1) ITEPA 2003, see EIM23101.

Electric cars are cars that are propelled solely by electricity, normally by way of a battery.

Electric cars are shown as type E on the form P46(Car), the form that employers use to notify HMRC when cars are made available or changed, see EP2431.

Cars first registered on or after 1 January 1998: reduction in appropriate percentage

There is a reduction of 6% for electric cars. As the appropriate percentage for electric cars is 15% (see EIM23415), in practice the tax charge for electric cars will be 9% of the price of the car.

Example

The price of a car for tax purposes is £13,000. The appropriate percentage is 9% (15% - 6% = 9%). So the basic car benefit charge is £1,170 (£13,000 x 9% = £1,170).

Cars first registered before 1 January 1998

Remember that reductions do not apply to these cars.

Application to qualifying low emissions cars (QUALECs)

Type E cars are excluded from the definition of QUALECs ( EIM23402), so the above applies to all type E cars.