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HMRC internal manual

Employment Income Manual

Car benefit calculation Steps 1-6, 2008/09 to 2010/11: car manufactured to run on E85 fuel (type G): 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 EIM24840.

Years affected

This reduction applies only to years from 2008/09 to 2010/11. No reduction is available in earlier years.

Cars affected

Only cars manufactured to be capable of running on E85 fuel are affected by the adjustment on this page; see EIM24840.

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

If it is not, 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 EIM24725 for 2008/09 to 2010/11 only).


The price of the car is £17,600 and its CO2 emissions figure 167 g/km.

The car is not a QUALEC (had it been, the appropriate percentage would be 10% with no further reduction, see EIM24605).

The appropriate percentage from the ready reckoner is 21%. There is a standard reduction of 2%. The appropriate percentage (the figure at step 5) is therefore 21% - 2% = 19%. The basic car benefit charge (the figure at step 6) is £17,600 x 19% = £3,344.