All change for Car and Fuel Benefits
1st April 2010
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This article was first published in our April 2010 E-Newsletter

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From 6 April 2010 the taxable benefit charged for the use of company cars and fuel for those vehicles is increasing. If you drive a petrol-powered car with CO2 emissions of 160g/km the taxable benefit of driving that car will increase from 20% to 21% of it's list price.

The tax position for those who have free fuel with their vehicles is even worse. The value of the fuel-benefit for all company cars is based on a fixed value which is increasing from £16,900 to £18,000. This value is multiplied by the percentage used to calculate the car benefit. For example the taxable benefit of having free fuel for a petrol car with emissions of 160g/km will increase from £3,380 to £3,780.

Company van drivers are also hit by the rise in the fuel benefit. Currently where free fuel is provided in a company van, and the van is used for some non-business journeys, the driver is taxed on £500 per year for the use of that fuel. From 6 April 2010 the van driver will be taxed on £550 per year for use of the fuel.

You can reduce these high tax charges by switching to a low emissions car. Where the CO2 emissions are 120g/km or less the car benefit for petrol cars is just 10% of the list price, and half that amount where CO2 emissions are 75g/km or less. We could only find one car with emissions in that bottom category: Toyota plug-in Prius, which has an official CO2 emissions rating of only 67g/km.

If your vehicle has zero emissions such as an electric car or van, there is no tax charge at all from 6 April 2010. What's more, when your business buys a new electric vehicle it can write-off the full cost for tax purposes in the year of acquisition.

The above is provided as a guide only and Crump Pearce & Co can not be held responsible in any way for any loss caused as a result of reading this article.


Crump Pearce &  Co
Chartered Certified Accounants

43 Merstow Green
WR11 4BB

01386 49999

About the Author

Tim P

Member since: 28th January 2011

I am a Chartered Certified Accountant and director of Crump Pearce & Co a local firm of accountants, business advisors and tax consultants.

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