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HMRC internal manual

Employment Income Manual

Car benefit calculation Step 5, appropriate percentage, 2002/03 to 2010/11: type B cars

Sections 125(3) and 137 ITEPA 2003; Regulation 6 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.

Approved CO2 emissions figure

The tax charge is calculated using the appropriate percentage calculated from the CO2 emissions figure when the car runs on LPG. (This is almost invariably lower than the CO2 emissions figure when the car runs on petrol).

Years to 2010/11: cars affected

EIM24825 details the various kinds of gas and bi-fuel cars and summarises all the statutory adjustments to the car benefit calculation. It also contains links to the adjustments which apply to other types of bi-fuel car.

Only type B cars are affected by the adjustment on this page.

The appropriate percentage arrived at in this way is then adjusted as below.

Years to 2010/11: reduction in appropriate percentage

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

  • 1%


  • an additional 1% for each full 20g/km that the CO2 emissions figure is below the lower threshold for the year.

For years from 2006/07 to 2010/11, the reduction is 2%.

See example EIM25035.

Years from 2011/12 onwards

Type B 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) from 2008/09 to 2010/11.

Cars first registered before 1 January 1998

Remember that reductions do not apply to these cars.