P11D tips – Car and van benefits 2023/24

Published by: Michael Hepburn, Senior Manager – Employment Tax

HMRC issued guidance in January 2024 that, from April 2026, there will be a requirement for all employers to payroll benefits in kind (BIKs) on a mandatory basis rather than voluntarily as is currently the practice. Read our full article here.

However, there is still a requirement to complete form P11D for 2023/24 for any non-payrolled benefits and accurate tracking and recording of car and van benefits are one of the main headaches when it comes to completing P11Ds. 

From April 2026, the same information will be required to be able to payroll car and van benefits, but it will need to be available in a real time basis.

Car benefits – P11D Section F

The car benefit CO2 rates for 2023/24 are the same as the prior year as they remain frozen until 2024/25. The rates for 2025/26 to 2027/28 have been published here. Don’t forget that for cars with CO2 emissions below 50 g/km not all hybrid cars are the same. To encourage drivers to choose the lowest emitting cars new cars in this range have a taxable benefit linked to their electrically powered range: cars with an electric range of 130 miles or more only trigger a 2% benefit whereas cars with an electric range of less than 30 miles trigger a 14% 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 less rigorous New European Driving Cycle (NEDC) tests.

For cars, the fuel benefit multiplier increased to £27,800 (x the appropriate percentage for the CO2 emissions) in 2023/24.

Van benefits – Section G

For vans, the benefit for unrestricted private use increased to £3,960 in 2023/24, and the van fuel benefit increased £757. For the use of zero emissions vans, the benefit is reduced to zero for a fully electric van.
And don’t forget, there is no taxable benefit on workplace charging of electric vehicles.
 

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