SE23491 - Car benefit from 2002/03 onwards: calculation for diesel cars with approved CO2 emissions figures (fuel type D): example

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.

These examples show how to do the calculations explained at SE23365.

In each of the following examples the basic car benefit charge may be reduced if the employee has to pay for private use of the car ( SE23530 onwards) or if the car is unavailable for part of the year ( SE23500 onwards).

Example 1: Diesel car with a low approved CO2 emissions figure (but not one that meets the Euro IV Standard)

• Price of the car for tax purposes is £15,000.
• Approved figure of CO2 emissions is 143g/km.
• Round 143 down to 140.
• Look up the appropriate percentage for 140g/km in the ready reckoner at SE23380.

2002/03

• Appropriate percentage is 15% as 140 is below the 165g/km lower threshold for that year.
• Add 3% diesel supplement, so the appropriate percentage becomes 18%.
• Basic car benefit charge is £15,000 x 18% = £2,700.

2003/04 and 2004/05

• Appropriate percentage remains at 18% because 140g/km will still be below the lower threshold for those years.

Example 2: Diesel car with a high approved CO2 emissions figure

• Price of the car for tax purposes is £20,000.
• Approved figure of CO2 emissions is 242g/km.
• Round 242 down to 240
• Look up the appropriate percentage in the ready reckoner at SE23380.

2002/03

• Appropriate percentage is 30%
• Add 3% diesel supplement, so appropriate percentage becomes 33%.
• Basic car benefit charge is £20,000 x 33% = £6,600

2003/04

• Appropriate percentage is 32%
• Add 3% diesel supplement, so appropriate percentage becomes 35%.
• Basic car benefit charge is £20,000 x 35% = £7,000

2004/05

• Appropriate percentage is 34%.
• Diesel supplement restricted to 1%, because the appropriate percentage cannot exceed the maximum of 35%.
• Basic car benefit charge is £20,000 x 35% = £7,000

For examples on diesel cars approved to Euro IV limits (fuel type L) see SE23495.