SE23445 - Car benefit from 2002/03 onwards: overview of road fuel gas vehicles

From 6 April 2002, the car benefit charge is calculated by multiplying the 'price of the car' by the 'appropriate percentage' based on the car's carbon dioxide (CO2) emissions.

There are several different types of car that run on road fuel gas. You need to be able to identify exactly what type you are dealing with in order to work out the right tax treatment.

For a definition of road fuel gas see the final paragraph of SE23107.

You will see from the definition that there are two main types of road fuel gas, though they are all treated in the same way. In practice, most cars that currently run on road fuel gas use Liquefied (or Liquid) Petroleum Gas. This is often abbreviated to LPG, and you are likely to find that people who drive cars of this sort call them LPG cars rather than road fuel gas cars.

The guidance on discounts for these vehicles will refer to LPG. But remember that the same rules apply if any other form of road fuel gas is used that comes within the definition in SE23107.

For car benefit purposes LPG cars are divided into fuel types B and C. These letters correspond with the letters used on form P46(Car) to identify fuel types. (This is the form that employers use to notify HMRC when cars are made available or changed - see EP2431). There are different reductions for each of these types.

Identify the type

LPG vehicles fall into two broad categories:

• cars that run on gas alone (rare at present)

• bi-fuel LPG/ petrol cars that have both gas and petrol tanks on board (probably the most commonly available of the alternatively fuelled cars)

Reductions only apply to cars first registered on 1 January 1998 or later.