Tax and travel

Measures affecting vehicle-related tax and benefits.

Call: 028 9038 2637 or Email: accountants@michaelhunterandcompany.co.uk

Car and fuel benefits

The taxable petrol and diesel car benefit is based on the car's CO2 emissions. It is calculated using the car's UK list price and applying the 'appropriate percentage'. The diesel supplement increased to 4% from 6 April 2018. It is removed altogether for diesel cars which are certified to the Real Driving Emissions 2 (RDE2) standard. The car fuel benefit is calculated by applying the same percentages to the fuel benefit charge multiplier, which for 2019/20 is £24,100.

2020/21 sees the introduction of a new range of bands with appropriate percentages ranging from 2%-19% for ultra-low emission vehicles (ULEVs) emitting less than 75 g/km of CO2. Cars with emissions over this amount would see the appropriate percentage set at the lesser of: 20%, plus 1% for each 5 g/km by which emissions exceed 75 g/km; and 37%.

VAT on fuel for private use in cars

Where businesses wish to reclaim the input VAT on fuel which has some degree of private use, they must account for output VAT for which they may use the flat rate valuation charge.

Company vans

The taxable benefit for the unrestricted private use of vans is £3,430 for 2019/20. There is a further £655 taxable benefit if the employer provides fuel for private travel.

Van and fuel charge Van £ Fuel £ Total £
Tax (20% taxpayer) 686.00 131.00 817.00
Tax (40% taxpayer) 1,372.00 262.00 1,634.00
Tax (45% taxpayer) 1,543.50 294.75 1,838.25
Employer's Class 1A NICs 473.34 90.39 563.73

There is a benefit charge for zero emission vans but there is no fuel benefit for such vans.

Mileage rates

Changes to the HMRC business mileage rates are announced from time to time. The fuel only advisory rates below relate to company cars only and apply from 1 September 2018.  

Vehicle First 10,000 miles Thereafter
Car / Van 45p 25p
Motorcycle 24p 24p
Bicycle 20p 20p

Car - fuel only advisory rates

Engine Capacity Petrol Diesel LPG
1400cc or less 12p 10p 7p
1401 - 1600cc 15p 10p 9p
1601 - 2000cc 15p 12p 9p
Over 2000cc 22p 13p 13p
CO2 emissions (g/km) Appropriate percentage
Petrol % Diesel %
0 - 50 16 20
51- 75 19 23
76 - 94 22 26
95 - 99 23 27
100 - 104 24 28
105 - 109 25 29
110 - 114 26 30
115 - 119 27 31
120 - 124 28 32
125 - 129 29 33
130 - 134 30 34
135 - 139 31 35
140 - 144 32 36
145 - 149 33 37
150 - 154 34 37
155 - 159 35
160 - 164 36
165 and above 37

Plug-in grants

The government has reformed the plug-in grant scheme, which offers grants towards the purchase of new qualifying ultra-low emission cars. The scheme will now focus on zero emission models such as pure electric and hydrogen fuel cell cars. By 9 November 2018 at the latest, the grant rate for Category 1 vehicles will reduce from £4,500 to £3,500 and Category 2 and 3 vehicles will no longer be eligible. The government has rolled out new plug-in van and motorcycle grants.

Vehicle Excise Duty (VED) rates

VED bands and rates from 1 April 2019 for cars first registered on or after 1 April 2017

For the first year this is based on CO2 emissions. However, new diesel vehicles registered after 1 April 2018 that do not meet the RDE2 standard will be charged a supplement on their First Year Rate to the effect of moving up by one VED band.

After the first year, all vehicles with zero emissions will be exempt from the standard rate of vehicle tax, and all other petrol or diesel vehicles will pay a standard rate of £145 a year. An additional rate will be added to the vehicle tax for all new vehicles with a list price of over £40,000 (including zero emission vehicles). This additional rate of £320 will be payable each year for five years from the end of the first vehicle licence. After the five year period the standard rate will apply.

The government proposes to change to the new worldwide harmonised light vehicle testing procedure (WLTP) for measuring CO2 emissions.

Standard rates which apply from 1 April 2019 for cars registered from 1 March 2001 to 31 March 2017

VED Band CO2 emissions Standard Rate*
(g/km) £
A Up to 100 0
B 101 - 110 20
C 111 - 120 30
D 121 - 130 125
E 131 - 140 145
F 141 - 150 160
G 151 - 165 200
H 166 - 175 235
I 176 - 185 260
J 186 - 200 300
K* 201 - 225 325
L 226 - 255 555
M Over 255 570

*Includes cars emitting over 225 g/km that were registered before 23 March 2006.

CO2 emissions First year rate
(g/km) £
0 0
1 - 50 10
51 - 75 25
76 - 90 110
91 - 100 130
101 - 110 150
111 - 130 170
131 - 150 210
151 - 170 530
171 - 190 855
191 - 225 1,280
226 - 255 1,815
Over 255 2,135

Home | Contact us | Accessibility | Disclaimer | Help | Site map |

© 2018 Michael Hunter & Company. All rights reserved. | Michael Hunter & Company, Old Bank House, 161-163 Upper Lisburn Road, Belfast, Northern Ireland BT10 0LJ

We use cookies on this website, you can find more information about cookies here.

Chartered Accountants Ireland