Diesel cars have had a lot of bad press in the last four years, but there are still a large number of diesel-powered company cars around as they tend to be more fuel efficient for long journeys.
When reporting the taxable benefit for diesel cars (which don’t comply with Euro 6d) the relevant percentage of the list price has four percentage points added on, up to the maximum of 37%. This means that company cars thast are diesel with emissions of 160g/km or more are taxed at 37% of list price (for 2018/19), so it doesn’t matter what the CO2 emissions are above 160g/km as the car will still be taxed at 37% of list price.
The maximum list price percentage is reached for diesel company cars with CO2 emissions of 145g/km in 2019/20.
New diesel cars are now being sold that meet the Euro standard 6d, which gives them two advantages:
- the 4% supplement doesn’t apply so the taxable benefit is calculated as per petrol cars; and
- the £12.50 daily charge in London’s ultra-low emissions zone does not apply.
Where an employee has been provided with a new diesel company car, which meets Euro standard 6d, this should be reported as fuel type F on the form P46(car) for 2019/20. Where a Euro standard 6d diesel car was provided in 2018/19, it should be report on the 2018/19 P11d as “fuel type A”. But check that your expenses and benefits software has calculated the correct taxable benefit for 2018/19 as the 4% supplement should not apply to Euro standard 6d cars, even in 2018/19.
For further reading see Employer Bulletin for April 2019 on Page 11
A list of Euro 6d diesel cars can be found here