Income Tax (Earnings and Pensions) Act 2003 section 142

Car first registered before 1st January 1998: the appropriate percentage

Section 142 sets out how to determine the appropriate percentage used in calculating the taxable benefit for a company car that was first registered before 1 January 1998.

• Cars registered before 1 January 1998 use engine size rather than CO2 emissions to determine the appropriate percentage, because such older cars are unlikely to have a recognised CO2 emissions figure.
• For cars with a conventional internal combustion engine (one or more reciprocating pistons), the appropriate percentage is 24% for engines of 1,400cc or less, 35% for engines over 1,400cc up to 2,000cc, and 37% for engines over 2,000cc.
• The same percentages apply regardless of the type of fuel the car uses, so petrol and diesel cars of the same engine size are treated equally.
• For any car that does not have a conventional internal combustion engine with reciprocating pistons, a flat appropriate percentage of 37% applies.