SolvedEIM25060 | Car benefit calculation Steps 1-6: 2011 to 2012 onwards: all cars except types E and D, electric-only and diesel (type A): example
From HM Revenue & Customs · Employment Income Manual
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 either:
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 to 2012
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 × 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 to 2012
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 × 10% = £1,500.