EIM24815 - 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 to 2010, 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%.

Example

The price of a type E car for tax purposes is £13,000. The appropriate percentage is 9% (for years to 2009 to 2010, 15% - 6% = 9%). The basic car benefit charge is £1,170 (£13,000 × 9% = £1,170).

From 2010 to 2011 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.