The Revenue have produced updated guidance in the Employment Income Manual on how car benefits are calculated. The guidance sets out the basis for the calculation using the list price of the car and an appropriate percentage normally based on the CO2 emissions of the car. There are lower benefits, and therefore less tax to pay, on energy efficient or ‘green’ cars and the guidance for the benefit calculation for these cars is also included.

The revised guidance is welcome as there are significant changes to the calculation rules for energy efficient cars and also for Euro IV or ‘clean’ diesels from 6 April 2006.

Internet link:

To see the Revenue guidance go to:
Revenue manuals