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HMRC internal manual

Employment Income Manual

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HM Revenue & Customs
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Car benefit calculation Steps 1-6, 2002/03 to 2010/11: hybrid petrol/electric car (type H): example

This page illustrates steps 5 and 6 of the method statement in Section 121(1) ITEPA 2003, see EIM24015 and the example shows how to do the calculations explained at EIM24820.

The price of the car and accessories (the figure at step 4) is £17,000. The CO2 emissions figure is 120g/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 if necessary, 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).

2003/04

The appropriate percentage from the ready reckoner is 15% (CO2 below lower threshold). There is a standard reduction of 2%, plus an additional 1% (CO2 is 35g/km below the 155g/km lower threshold for the year). The appropriate percentage (the figure at step 5) is therefore 15% - 3% = 12%. The basic car benefit charge (the figure at step 6) is £17,000 x 12% = £2,040.

2006/07

The appropriate percentage from the ready reckoner is 15% (CO2 below lower threshold). There is a standard reduction of 3%. The appropriate percentage (the figure at step 5) is therefore 15% - 3% = 12%. The basic car benefit charge (the figure at step 6) is £17,000 x 12% = £2,040.

2008/09

The car is a QUALEC (CO2 emissions do not exceed 120, EIM24605) so the appropriate percentage is 10%. There is no further reduction for type H cars (EIM24820) so the appropriate percentage (the figure at step 5) is 10%. The basic car benefit charge (the figure at step 6) is £17,000 x 10% = £1,700.

Years from 2011/12

See EIM25060.