As practitioners may be aware, the car benefit charge for a full year is obtained by multiplying the price of the car for tax purposes by the ‘appropriate percentage’ which is determined based on the CO₂ emission threshold of the car. With effect from 2010–11 changes have been made to CO₂ emission thresholds and the appropriate percentages.

From 2010–11 the lower threshold (the CO₂ emissions figure which sets the 15% rate) is reduced from 135 to 130 g/km. In addition the appropriate percentage for cars powered solely by electricity is reduced to 0% for five years.

For the tax year 2011–12 the car benefit rules will be significantly simplified and from 2012–13 the special rules for qualifying low emissions cars QUALECs, those with CO₂ emissions not exceeding exactly 120 g/km) will be abolished. Details regarding all the proposed changes are available here.