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HMRC internal manual

Employment Income Manual

Car benefit calculation Step 5, appropriate percentage, 2002/03 to 2009/10: type E, cars propelled solely by electricity

Sections 140 and 142 ITEPA 2003 and Regulation 4 of The Income Tax (Car Benefits) (Reduction of Value of Appropriate Percentage) Regulations 2001, SI 2001 No. 1123, as amended

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

Electric cars are cars that are propelled solely by electricity, normally by way of a battery.

Electric cars are shown as type E on the form P46(Car), the form that employers use to notify HMRC when cars are made available or changed, see EP2431.

Reduction in appropriate percentage

Until 2009/10, primary legislation set the appropriate percentage for type E cars at 15% (see EIM24950). Secondary legislation then reduced this by 6% to a net charge of 9%.


The price of a type E car for tax purposes is £13,000. The appropriate percentage is 9% (for years to 2009/10, 15% - 6% = 9%). The basic car benefit charge is £1,170 (£13,000 x 9% = £1,170).

From 2010/11 onwards, see EIM24850.

Cars first registered before 1 January 1998

No electric-only cars were registered in that period.

Application to qualifying low emissions cars (QUALECs)

Type E cars are excluded from the definition of QUALECs (EIM24605), so the above applies to all type E cars.