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HMRC internal manual

Employment Income Manual

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HM Revenue & Customs
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Car benefit: special cases: employees with frequent changes of car (from 2009/10): benefit charge of notional car: example

This page gives an example of Steps 1-5 of the process described at EIM23825. Daily rental businesses should adapt it to the slightly different rules which apply to them.

A non-rental business has 8 cars to be averaged for 2009/10, spread between 5 models:

Model & car number List price of particular variant Accessories Averaging price CO2 emissions Fuel HMRC group
             
A1 9,995 755 10,750 109 diesel 2
A2 10,995 905 11,900 145 petrol 2
A3 11,995 1,105 13,100 124 diesel 3
B4 11,495 955 12,450 159 petrol 3
B5 13,995 1,255 15,250 124 diesel 3
C6 18,995 2,005 21,000 187 petrol 4
D7 19,995 2,505 22,500 164 hybrid 4
E8 21,995 2,005 24,000 223 petrol 5

The average price is calculated as follows:

HMRC group 2 3 4 5
         
A1 10,750      
A2 11,900      
A3   13,100    
B4   12,450    
B5   15,250    
C6     21,000  
D7     22,500  
E8       24,000
Total price 22,650 40,800 43,500 24,000
Cars in group 2 3 2 1
Average price 11,325 13,600 21,750 24,000

The average CO2 emissions and appropriate percentage for 2009/10 are calculated as follows:

HMRC group 2 3 4 5
         
A1 109      
A2 145      
A3   124    
B4   159    
B5   124    
C6     187  
D7     164  
E8       223
Diesel adjustment 15 30    
Hybrid adjustment     -15  
Total emissions 269 437 336 223
Cars in group 2 3 2 1
Average CO2 134 145 168 223
Appropriate percentage 15% 17% 21% 32%

The car benefit for each group for 2009/10 is therefore:

HMRC group 2 3 4 5
         
Average price 11,325 13,600 21,750 24,000
Appropriate percentage 15% 17% 21% 32%
Car benefit 1,698 2,312 4,567 7,680

2008/09 and earlier years

This guidance applies only for 2009/10 and later years. Local arrangements applied for years to 2008/09 as described at EIM23750 onwards.