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HMRC internal manual

Employment Income Manual

HM Revenue & Customs
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Car benefit calculation Step 5, appropriate percentage, 2008/09 to 2010/11: type G cars

Income Tax (Car Benefits) (Reduction of Value of Appropriate Percentage) Regulations 2001, SI 2001 No 1123 (as amended by SI 2007 No 3068)

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

It only applies to years from 2008/09 to 2010/11. No reduction is available between 2002/03 and 2007/08 or from 2011/12 onwards.


This is a fuel made up of unleaded petrol mixed with 85% bioethanol. Normal petrol-powered cars cannot run on it without damaging the engine, but can be modified to use it safely.

Only cars manufactured to be capable of running on E85 qualify for the reduction. No reduction is available for cars converted to be able to run on E85 after manufacture.

It should normally be clear from the owner’s manual or handbook if a car is manufactured to be capable of running on E85. (This content has been withheld because of exemptions in the Freedom of Information Act 2000)

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

Years 2008/09 to 2010/11: cars first registered on or after 1 January 1998: reduction in appropriate percentage

For years from 2008/09 to 2010/11, the reduction is 2%.

See example EIM25050.

Years from 2011/12 onwards

Type G 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

Remember that reductions do not apply to these cars.