Background
8.Section 139 of ITEPA sets out the basis for calculating the appropriate percentage for cars with CO emissions. The appropriate percentage multiplied by the list price of the car (adjusted for any taxable accessories) provides the level of chargeable benefit for company car tax for employees and of Class 1A NICs for employers.
9.From 6 April 2015, the graduated table of company car tax bands will provide for a 5 per cent band for cars with emissions of 0-50g CO per km, a 9 per cent band for cars with emissions of 51-75g CO per km, a 13 per cent band for other low emissions cars (76g-94g CO per km) with a 2 per cent increase for each rise in emissions of 5g CO per km from 95g CO to a new maximum of 37 per cent.
10.Section 140 ITEPA sets out the basis for calculating the appropriate percentage for cars without CO emissions. From 6 April 2015, the appropriate percentage for cars which are incapable of producing CO emissions under any circumstances when being driven will be set at 5 per cent, and will rise to 37 per cent for other cars.
11.On average, the level of CO emissions produced by company cars fell by more than 6g (-4.2%) in the last year. These changes support the Government’s commitment to reducing the UK’s carbon footprint.
