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HMRC internal manual

Employment Income Manual

Car benefit calculation Step 5: appropriate percentage, 2002/03 to 2010/11: type H, petrol/electric hybrid cars

Regulation 5 of The Income Tax (Car Benefits) (Reduction of Value of Appropriate Percentage) Regulations 2001, SI 2001 No. 1123 (as amended by SI 2005 No 2209)

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

In petrol/electric hybrid cars, an internal combustion engine is combined with a battery electric traction system. The electric traction system must be capable of propelling the car in normal driving. It follows that a normal petrol car with an electrically powered starter motor is not a petrol/electric hybrid car.

Neither is a diesel/electric hybrid car, because it is not “capable of being propelled by petrol and electricity” (author’s emphasis). They are type P cars for these years (EIM24800).

It should normally be clear from the owner’s manual or handbook if a car is a petrol/electric hybrid. (This content has been withheld because of exemptions in the Freedom of Information Act 2000)

Years to 2010/11

Petrol/electric hybrid cars are shown as fuel type H on form P46(Car), the form that employers use to notify HMRC when cars are made available or changed, see EP2431.

Years 2002/03 to 2010/11: cars first registered on or after 1 January 1998: reduction in appropriate percentage

For years from 2002/03 to 2005/06 inclusive, the reduction is:

  • 2%


  • an additional discount of 1% for each full 20g/km that the CO2 emissions figure is below the qualifying level for the minimum charge for the year, see EIM24600.

For years from 2006/07 to 2010/11, the reduction is 3%.

See example EIM25030.

Years from 2011/12 onwards

Type H cars are merged into new type A from 2011/12 onwards (see EIM24860), with no reduction in the appropriate percentage.

Application to qualifying low emissions cars (QUALECs)

These reductions do not apply to QUALECs (EIM24605).

Cars first registered before 1 January 1998

See EIM24975. Remember that reductions do not apply to these cars.