Company diesel car supplement

12 May 2018

This article was featured in the June 2018 issue of the magazine.

From the start of tax year 2018–19 (i.e. from 6 April 2018), the diesel supplement relating to the car benefit and the car fuel benefit charge will increase from 3% to 4% for all diesel cars that are not certified to meet the Real Driving Emissions 2 (RDE2) standard which is also known as ‘Euro 6d’.

If the diesel company car is RDE2 (Euro 6d) compliant, the diesel supplement must not be applied when calculating the car benefit and car fuel benefit charge.

The diesel supplement will continue to apply to cars using diesel only (not diesel hybrids) and registered on or after 1 January 1998, which do not have a registered nitrogen oxide (NOx) emissions value. It will also apply to models registered on or after 1 January 1998, which have a registered NOx emissions value that exceeds the RDE2 (Euro 6d) standard.

For the tax year beginning 6 April 2018 only: 

  • use the appropriate percentage for ‘Fuel Type AAll other cars’ when calculating the cash equivalent for diesel company cars which are RDE2 (Euro 6d) compliant

  • use ‘Fuel Type A – All other cars’ when reporting diesel company cars which are RDE2 (Euro 6d) compliant in the P11D or P46Car returns. 

Employers that have registered to payroll the car and car fuel benefit charge for RDE2 (Euro 6d) compliant diesel cars, should:

  • calculate the cash equivalent using the appropriate percentage for ‘Fuel Type A’, and 

  •  enter this amount in item 182 of the full payment submission (FPS) return, and

  • enter ‘A’ in item 177 in the FPS return.

The certificate of conformity available from the manufacturer will confirm whether the car is RDE2 (Euro 6d) compliant.

It is expected that prior to tax year 2019–20 there will not be many if any cars on the market meeting the RDE2 (Euro 6d) standard, but there may be a few.