EIM23496 - Car benefit: calculation for car manufactured to run on E85 fuel (type G): example

This page illustrates steps 5 and 6 of the method statement in Section 121(1) ITEPA 2003, see EIM23101 and the example shows how to do the calculations explained at EIM23455.

Years affected

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

Cars affected

Only cars manufactured to be capable of running on E85 fuel are affected by the adjustment on this page; see EIM23455.

For years from 2008/09 only, check whether the car is a QUALEC ( EIM23402).

If it is not, look up the appropriate percentage for a petrol-powered car in the ready reckoner at EIM23410.

Finally, make any required adjustments for this type of car (summary at EIM23421).

2008/09

The price of the car is £17,600 and its CO2 emissions figure 167 g/km.

The car is not a QUALEC (had it been, the appropriate percentage would be 10% with no further reduction, see EIM23402 and EIM23445 respectively).

The appropriate percentage from the ready reckoner is 21%. There is a standard reduction of 2%. The appropriate percentage (the figure at step 5) is therefore 21% - 2% = 19%. The basic car benefit charge (the figure at step 6) is £17,600 x 19% = £3,344.