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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: 2011/12 onwards: all cars except types E and D, electric-only and diesel (type A): 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 EIM24860.

Example 1: Type A car with approved CO2 emissions figure 

The price of the car and accessories (the figure at step 3) is £15,000. The approved CO2 emissions figure is 183g/km .

First, check whether the car is

  • for 2011/12 only, a QUALEC (EIM24605), or
  • for 2012/13 to 2014/15, a car with CO2 emissions between 1-75 g/km (EIM24610).

If it is not, round the CO2 emissions figure down to 180 g/km, then look up the appropriate percentage for a type A car in the ready reckoner at EIM24705.

No adjustments are required for this type of car.

2011/12

The car is not a QUALEC (EIM24605) because its CO2 emissions figure exceeds 120. The appropriate percentage (the figure at step 5) is 26%. No adjustments are necessary. The basic car benefit charge (the figure at step 6) is £15,000 x 26% = £3,900.

Example 2: Petrol car with low CO2 emissions

The price of the car and accessories (the figure at step 3) is £15,000. The approved figure of CO2 emissions is 119 g/km.

First, 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 type A car in the ready reckoner at EIM24705.

No adjustments are required for this type of car.

2011/12

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

The appropriate percentage (the figure at step 5) is 10% (EIM24605). No adjustments are necessary. The basic car benefit charge (the figure at step 6) is £15,000 x10% = £1,500.