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HMRC internal manual

Employment Income Manual

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Car benefit calculation Steps 1-6, 2002/03 to 2010/11: bi-fuel LPG car with no approved gas CO2 emissions figure (type C): 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 EIM24835.

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 C cars (both types C1 and C2) are affected by the adjustment on this page. For simplicity, the two examples below require the same calculation.

TYPE C1: car manufactured as bi-fuel, but first registered in 1998 or 1999.

These cars have only one approved CO2 emissions figure (for petrol).

The list price of the bi-fuel car is £17,900; the equivalent petrol-only model has a list price of £15,700. The additional cost of manufacturing the vehicle to run on LPG as well as petrol is ignored (see EIM24280), so the figure at step 4 is £15,700. The petrol CO2 emissions figure is 170g/km (no rounding required).

Look up the appropriate percentage for a petrol-powered car at 170g/km CO2 in the ready reckoner at EIM24700, then make any required adjustments for this type of car (summary at EIM24720 for 2002/03 to 2005/06 only).

TYPE C2: petrol car converted to use LPG as well as petrol after the type approval process

The list price of the car and accessories is £17,500, including LPG conversion costs of £1,800. The conversion costs are ignored (see EIM24280), so the figure at step 4 is £15,700. The petrol CO2 emissions figure is 170g/km (no rounding required).

Look up the appropriate percentage for a petrol-powered car at 170g/km CO2 in the ready reckoner at EIM24700, then make any required adjustments for this type of car (summary at EIM24720 for 2002/03 to 2005/06 and EIM24725 for 2006/07 onwards).

CALCULATION

2003/04: the appropriate percentage from the ready reckoner is 18%. There is a standard reduction of 1% (no additional reduction is available for this type of car). The appropriate percentage (the figure at step 5) is therefore 18% - 1% = 17%. The basic car benefit charge is (the figure at step 6) £15,700 x 17% = £2,669.

2006/07: the appropriate percentage from the ready reckoner is 21% but there is no longer any reduction. The appropriate percentage (the figure at step 5) is therefore 21%. The basic car benefit charge (the figure at step 6) is £15,700 x 21% = £3,297.

Years from 2006/07 to 2010/11

No adjustments are available for type C cars, so the appropriate percentage is calculated as though they were type P cars, see EIM24550.

Years from 2011/12

See EIM25060.