EIM23455 - Car benefit: type G cars (those manufactured to run on E85 fuel)

Income Tax (Car Benefits) (Reduction of Value of Appropriate Percentage) Regulations 2001, SI 2001 No 1123 (as amended by SI 2007 No 3068)

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

It only applies to years from 2008/09 onwards. No reduction is available in earlier years.

E85

This is a fuel made up of unleaded petrol mixed with 85% bioethanol. Normal petrol-powered cars cannot run on it without damaging the engine, but can be modified to use it safely.

Only cars manufactured to be capable of running on E85 qualify for the reduction. No reduction is available for cars converted to be able to run on E85 after manufacture.

It should normally be clear from the owner's manual or handbook if a car is manufactured to be capable of running on E85 (This text has been withheld because of exemptions in the Freedom of Information Act 2000)

Such cars are shown as fuel type G on 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

For years from 2008/09 onwards, the reduction is 2%.

See example EIM23496.

Application to qualifying low emissions cars (QUALECs)

These reductions do not apply to QUALECs ( EIM23402).