Green Car Tax Explained

Taxable benefit for the car and fuel

• If you are a sole trader or a partner and acquire a car through your business, or privately, you make a claim against your self assessment tax bill to claim the costs of your business mileage.

• If you are a company director, or your pay - including the value of your benefits - is more than £8500 per year, then you'll always have to pay tax on any extra benefits you get i.e. a company car.

• Any contributions you make, as the driver, towards the cost of your vehicle need to be taken into account i.e. the value of the taxable benefit may be less.

• You also need to take into account how long you have had the car for in the relevant financial year.

• Work out your car P11D taxable list price, which is the list price of the car including accessories, plus delivery charges and taxes due.

• Then find out the car CO2 output figure for your vehicle.- The type of fuel the car uses also matters i.e. petrol, diesel or alternative.

• Multiply the P11D taxable list price by the percentage based on your car CO2 output (and fuel type) to calculate the taxable benefit.

• Multiply this by your rate of income tax to see what you will have to pay.

• Employees will also be taxed if their employer provides fuel for private use.

• This could be as a result of using a company fuel card and not repaying the private usage element.

• The fuel benefit for 2010-2011 is simply calculated by multiplying a fixed sum of £18,000 by the taxable percentage based on the car CO2 output.