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HMRC internal manual

Employment Income Manual

Car benefit calculation Steps 1-6, 2002/03 to 2010/11: diesel car with approved CO2 emissions figure (type D): example

This page illustrates steps 5 and 6 of the method statement in Section 121(1) ITEPA 2003, see EIM24015 and the examples show how to do the calculations explained at EIM24805. They do not apply to diesel cars approved to Euro IV/Euro 4 or Euro 5 limits, which are type L (see example at EIM25045).

Example 1: Diesel car (up to Euro III) with a low approved CO2 emissions figure

The price of the car and accessories (the figure at step 4) is £15,000. The approved figure of CO2 emissions is 119g/km.

For years from 2008/09 only, check whether the car is a QUALEC (EIM24605).

If it is not, round the CO2 emissions figure down to 115 g/km, then look up the appropriate percentage for a petrol-powered car in the ready reckoner at EIM24700.

Finally, make any required adjustments for this type of car (summary at EIM24720 for 2002/03 to 2005/06 and EIM24725 for 2006/07 to 2010/11).

2006/07 and 2007/08

The appropriate percentage from the ready reckoner is 15% (CO2 is below the lower threshold for the year). Add 3% diesel supplement. The appropriate percentage (the figure at step 5) is therefore 15% + 3% =18%. The basic car benefit charge (the figure at step 6) is £15,000 x 18% = £2,700.

2008/09

The car is a QUALEC: the unrounded CO2 emissions figure of 119 does not exceed the limit of 120, EIM24605.

The appropriate percentage (the figure at step 5) is 10% (EIM24605). Add the 3% diesel supplement (EIM24725). The basic car benefit charge (the figure at step 6) is £15,000 x 13% = £1,950.

Example 2: Diesel car with a high approved CO2 emissions figure

The price of the car and accessories (the figure at step 4) is £20,000. The approved figure of CO2 emissions is 232g/km.

For years from 2008/09 only, check whether the car is a QUALEC (EIM24605).

If it is not, round the CO2 emissions figure down to 230g/km, then look up the appropriate percentage for a petrol-powered car in the ready reckoner at EIM24700.

Finally, make any required adjustments for this type of car (summary at EIM24720 for 2002/03 to 2005/06 and EIM24725 for 2006/07 to 2010/11).

2006/07 and 2007/08

The appropriate percentage from the ready reckoner is 32%. Add 3% diesel supplement, subject to a maximum at step 5 of 35%. The appropriate percentage (the figure at step 5) is therefore 32% + 3% = 35%. The basic car benefit charge (the figure at step 6) is £20,000 x 35% = £7,000.

2008/09

The car is not a QUALEC, so the appropriate percentage from the ready reckoner is 34%. Add 3% diesel supplement, subject to a maximum at step 5 of 35%. The appropriate percentage (the figure at step 5) is therefore 34% + 1% (restricted) = 35%. The basic car benefit charge (the figure at step 6) is £20,000 x 35% = £7,000.

Euro IV and Euro 5 diesels

For examples on diesel cars approved to Euro IV and Euro 5 limits (fuel type L) see EIM25045.

Years from 2011/12

See EIM25060.