Example 1 - Car Benefit
You are provided with a Ford Focus 1.8i Ghia (petrol) with a list price of £14,000 and a CO2 emissions figure of 181.
Step 1:
The CO2 figure of 181 falls in the band 180 to 184 giving a tax % for petrol cars of 23%
Step 2:
The benefit in kind is calculated as £14,000 x 23% = £3,220
Step 3:
The tax payable is calculated as follows:
For a 22% taxpayer: £3,220 x 22% = £708.40 p.a.
For a 40% taxpayer: £3,220 x 40% = £1,288.00 p.a.

Example 2 - Fuel Benefit
As in example 1 above, you are provided with a Ford Focus 1.8i Ghia (petrol) with a list price of £14,000 and a CO2 emissions figure of 181. In addition your employer pays for all the fuel, including your private use.
Step 1:
The car benefit tax % figure is 23%
Step 2:
The fuel benefit in kind is calculated as £14,400 x 23% = £3,312
Step 3:
The tax payable is calculated as follows:
For a 22% taxpayer: £3,312 x 22% = £728.64 p.a.
For a 40% taxpayer: £3,312 x 40% = £1,324.80 p.a.

Notes
1. The above calculations are for a complete year. If you have the car for less than a year the calculations will be reduced pro-rata.

2. The car calculation is based on the new list price of the car - not the price paid. So even if you were provided with a second hand car the tax would be calculated on the basis of the new list price.

3. There is no reduction for high business mileage.

4. Fuel benefit applies if your employer pays for any private fuel at all.

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