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HMRC internal manual

Employment Income Manual

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Car benefit calculation Step 5, appropriate percentage: introduction

Section 121 (step 5) and Sections 133 to 142 ITEPA 2003

This page relates to step 5 of the method statement in Section 121(1) ITEPA 2003, see EIM24015.

The car benefit charge is calculated by multiplying the interim sum at step 4 (the price of the car and accessories, see EIM24010 onwards) by the appropriate percentage based on the car’s carbon dioxide (CO2) emissions, which is determined at step 5.

Guidance on the appropriate percentage is in this section of the guidance, which is set out as follows:

  • finding the approved CO2 emissions figure, see EIM24505 onwards
  • the appropriate percentage for cars first registered on or after 1 January 1998:

    • with a CO2 emissions figure, see EIM24550 
    • without a CO2 emissions figure, see EIM24950 
    • adjustments for alternatively fuelled or propelled vehicles, see EIM24720 onwards
  • the appropriate percentage for all cars first registered before 1 January 1998, see EIM24975.