The threshold for the minimum percentage charge rate for calculating company car tax reduces to 135g/km for 2008/9, with this rate frozen until 2009/10. In 2010/11, the lower threshold reduces to 130g/km. (see table below)

A new 10% tax band for company cars with CO2 emissions of 120g/km or less is applicable from April 2008.

For diesel vehicles, this new band is fixed at 13% of taxable value owing to the 3% surcharge for these vehicles.

The chart below shows the taxable percentages of P11D price applicable for 2008/9 and beyond (including the 10% rate).

Taxable percentages of P11D value

* Add 3% for diesel. ** Add 2% for diesel. *** Add 1% for diesel. **** Max charge, so no supplement.

• Vehicle excise duty (VED) in 2008/9
• 2009 vehicle excise duty reform
• Company car tax in 2008/9
• Company car tax: calculating your benefit-in-kind liability in 2008/9
• Business mileage in a private car: reimbursement rates in 2008/9
• Employer-provided ‘free’ fuel for private mileage: benefit or liability?
• Capital allowances to be based on emissions of CO2 from April 2009
• Calculation of employers’ Class 1A National Insurance Contributions
• Company vans
• Biofuels