Company Car Tax.

Car benefit changes.

• Company cars are now taxed according to co2 output, with cars that produce higher levels of co2 penalised.
• The minimum (15% of list price) and maximum (35% of list price) taxable benefit rates remain but are linked to co2 output rather than business mileage.
• Business mileage no longer influences company car taxation.
  An escalator is included in the new co2-based system to increase company car benefit automatically by 10% per annum in each of the next two tax years (2003/04 and 2004/05)
• Diesel cars incur a pollution penalty, with 3% added to the taxable percentage of list price unless they meet the forthcoming Euro IV emissions standard.
• Cars powered by ‘eco-friendly’ fuels qualify for reductions in the taxable benefit depending on the type of fuel.
• Private fuel benefit will rise by 16% for the 2002/03 tax year.