P11D tips – Car and van benefits 2019/20

22 February 2021

Published by: Michael Hepburn, Senior Manager – Employment Tax

Accurate tracking and recording of car and van benefits are one of the main headaches when it comes to completing P11Ds and there were changes in 2020/21.

Car benefits - Section F

As well as the usual car benefit CO2 increases for 2020/21, the structure of benefit rates for cars with CO2 emissions below 50 g/km has changed. Not all hybrid cars are the same and to encourage drivers to choose the lowest emitting cars, new cars in this range now have a taxable benefit linked to their electrically powered range: cars with an electric range of 130 miles don’t trigger a benefit whereas cars with an electric range of less than 30 miles trigger a 12% benefit .

It is also important to remember that the benefit rates for cars registered after 6 April 2020 are different to older cars. For new cars, HMRC now uses the Worldwide Harmonised Light Vehicle Test Procedure (WLTP) and a slightly lower benefit rate than for older cars whose emissions were tested under the lees rigorous New European Driving Cycle (NEDC) tests.

For cars, the fuel benefit multiplier increased to £24,500 (x the appropriate percentage for the CO2 emissions) in 2020/21.

Van benefits – Section G

For vans, the benefit for unrestricted private use increased from £3,490 in 2020/21, and the van fuel benefit increased £666. For the use of zero emissions vans the benefit is charged at 80% of the full van benefit although this will drop to zero for a fully electric van for 2021/22.

And don’t forget, there is no taxable benefit on workplace charging of electric vehicles.

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