Chargeable on employees and directors.
The fuel benefit charge (FBC) multiplier for 2020/21 is £24,500.
The tax you pay on your company car is usually governed by six important factors, assuming that the car is made available for the full tax year:
- The list price of the car, on the day before it was first registered, plus certain accessories
- The rate at which the car emits carbon dioxide CO2
- The fuel type
- The exact date the car was first registered, as most cars registered before 6 April 2020 and on or after 6 April 2020, will be liable to a different benefit-in-kind rate
- Your highest rate of income tax
- Any capital contribution to the cost of the car up to a maximum of £5,000.
You can find your taxable percentage using the following table:
2020/21 company car taxable benefits table
|CO2 emissions (g/km)||Electric range (miles)||Cars registered before 6 April*||Cars registered on or after 6 April|
|1 to 50||130 and over||2%||0%|
|1 to 50||70 to 129||5%||3%|
|1 to 50||40 to 69||8%||6%|
|1 to 50||30 to 39||12%||10%|
|1 to 50||Under 30||14%||12%|
|51 to 54||n/a||15%||13%|
|Over 54||n/a||add 1% for every 5g/km up to 37%||add 1% for every 5g/km up to 37%|
*Diesels not meeting the RDE2 standard will be liable to a 4% surcharge, up to a maximum charge of 37%.
Add 4% if car runs solely on diesel up to a maximum of 37%, unless RDE2-compliant, for 2020/21.
Diesel plug-in hybrids are classed as alternative-fuel vehicles so are also not subject to 4% supplement.
How to find out how much CO2 your company car emits – see:
- The car’s V5 registration document
- Your dealer
- The data pages of car magazines (current models)
- The Vehicle Certification Agency
- The website of the Society of Motor Manufacturers and Traders
Reliable emissions data is not widely available for cars registered before 1 January 1998. For them, the following taxable percentages apply, regardless of fuel type:
|Engine capacity||Taxable %|
|Up to 1400cc||23%|
|1401 - 2000cc||34%|
Car fuel benefits
If the employee pays for the full cost of all fuel for private journeys (usually including home to work) there will be no car fuel benefit. In all other cases the full tax charge will be due.
The taxable car fuel benefit, for 2020/21, is calculated by multiplying £24,500 by the same percentage as applies (or would apply) for the car benefit.
A company car driver has a car which, on the day before it was first registered, had a list price of £30,000. It runs on petrol, registered before 6 April 2020 and emits 165g/km of CO2.
If we assume the driver pays tax at 40%, the annual tax bill on the car is: £30,000 x 37% x 40% = £4,440.
If the employer provides any fuel used for private journeys and is not reimbursed for the cost, the 2020/21 tax bill for the fuel is: £24,500 x 37% x 40% = £3,626.
The taxable benefit for any private use of company vans is £3,490, however, if the only private use of the van is for home-to-work travel then the van is not taxable. Insignificant other private use can also be ignored but care is needed.
There is also a taxable benefit of £666 if any fuel is provided by the employer for private travel (including home-to-work travel).
The tax payable for both van and fuel benefit (for private use) for a basic-rate (20%) taxpayer is £831.20, a higher-rate (40%) taxpayer is £1,662.40, and an additional-rate (45%) taxpayer using a company van would be £1,870.20.