Car fuel benefit charges to rise from April 2017

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The rates for calculating personal tax liability for the van benefit charge and the car and van fuel benefit charges are set to increase in 2017-18

The van benefit charge will increase 1.8% to £3,230 from the current £3,170; the car fuel benefit charge will increase to £22,600 (£22,200, 2016-17); and, the van fuel benefit charge increases to £610 (£598, 2016-17).

The changes will have effect from 6 April 2017.

Legislation will be introduced by an order to set the cash equivalent of the use of a van made available to an employee for private use that is more than insignificant at £3,230 for 2017 to 2018.

For vans that do not emit CO2 when driven, the cash equivalent is calculated based on the tapered appropriate percentage rate, which is 20% for 2017 to 2018.

The value of the multipliers for calculating the cash equivalent of the fuel benefit for a car is set at £22,600 for 2017 to 2018 and for vans it is set at £610 for 2017 to 2018.

The HMRC policy paper, Personal Tax: van benefit charge and the car and van fuel benefit charges, is available here

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