Plan Green - car benefit scheme (Spotlight 16)
Published 14 February 2013
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HM Revenue and Customs (HMRC) is aware of a scheme (Scheme Reference Number 65992834) that aims to reduce the amount of car benefit you pay tax on. It is done by purchasing carbon credits and offsetting them against the car’s carbon dioxide (CO2) emissions (which are used to calculate the taxable benefit).
HMRC believe this scheme doesn’t work, because for tax purposes the car’s CO2 emissions figure is set when it is first manufactured and registered.
The tax legislation is clear, the CO2 emissions figure recorded on the car’s registration document must be used when calculating the amount of car benefit. That figure cannot be altered at a later date, by seeking to offset carbon credits.
If your employer has entered into this scheme, you’re advised to consider carefully whether your car benefit figure is correct. HMRC will look to collect the tax due on the correct car benefit received.