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Car Benefit Charge – Situations where cars are changed frequently
Wednesday, November 18th, 2009
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In November 2008, HMRC announced new “averaging” arrangements that may be used by employers in the motor industry when calculating the reportable value of cars that are changed very frequently. The procedure involves determining the average price and emission level ratings for cars available in each car group at each location. A number of simplifications were later introduced from the start of the 2009/10 tax.
HMRC has announced a number of further changes to the arrangements that will be effective from the start of the 2010/11 tax year, as follows:
- Step 1, the starting point for the scheme, identifying the cars that are actually available to employee for private use, was fixed at the night for April 5/6 2009 for the 2009/10 tax year. In future the survey may be carried out on a night of the employer’s choice during the period 17-31 January in the previous tax year. For the 2010/11 tax year, therefore, the period will be 17-31 January 2010.
- The CO2 emissions figure is one of the pieces of information that must be recorded for each available car. If a car does not have a CO2 emissions figure, the following Tables are used:
Cars first registered on or after 1 January 1998
Engine size |
2009/10 | 2010/11 | 2011/12 |
| 0-1400cc | 135 | 130 | 125 |
| 1401 – 2000cc | 185 | 180 | 175 |
| over 2000cc | 235 | 230 | 225 |
| rotary engine | 235 | 230 | 225 |
Cars first registered before 1 January 1998
| Engine size | 2009/10 | 2010/11 | 2011/12 |
| 0-1400cc | 135 | 130 | 125 |
| 1401 – 2000cc | 170 | 165 | 160 |
| over 2000cc | 220 | 215 | 210 |
| rotary engine | 220 | 215 | 210 |
Step 2 requires the available cars to be separated into groups. An additional group is added to the list from 2010/11:
| For 2009/10 | For 2010/11 onwards | ||||
| Group | Price from | Price to | Group | Price from | Price to |
| 1 | £0.00 | £8,999.99 | 1 | £0.00 | £8,999.99 |
| 2 | £9,000.00 | £11,999.99 | 2 | £9,000.00 | £11,999.99 |
| 3 | £12,000.00 | £16,999.99 | 3 | £12,000.00 | £16,999.99 |
| 4 | £17,000.00 | £22,999.99 | 4 | £17,000.00 | £22,999.99 |
| 5 | £23,000.00 | £34,999.99 | 5 | £23,000.00 | £30,999.99 |
| 6 | £31,000.00 | £39,999.99 | |||
| 6 | £35,000.00 | £49,999.99 | 7 | £40,000.00 | £49,999.99 |
| 7 | £50,000.00 | £64,999.99 | 8 | £50,000.00 | £64,999.99 |
| 8 | £65,000.00 | £79,999.99 | 9 | £65,000.00 | £79,999.99 |
| 9 | £80,000.00 | upwards | 10 | £80,000.00 | upwards |
From 2010/11 only, employers may combine two adjacent bands from the Table for an entire tax year where, throughout that year, employees consistently use a number of models for private use which fall into the price range of the adjacent bands. This arrangement must apply to all employees in a location; it cannot apply to some and not to others.
Some other small changes are also made to reflect the changes to the car benefit provisions from 2011/12.
Further information:
Revised car averaging arrangements published
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