Company car costs updated to reflect CO2 emissions

Charges are to be based on CO2 emissions from April

Companies on the Isle of Man that provide cars to employees as a "benefit in kind" will be charged based on the vehicle's CO2 emissions, the Treasury has said.

The changes to the calculations are the first to be made in 15 years and affect employers who offer cars to workers for private use and pay for fuel, instead of awarding pay rises or other benefits.

The value of the car, based on its emissions, will be added to the employee's taxable salary.

Those using a larger petrol car, such as a Range Rover, will see about £2,750 added in tax, while electric vehicle drivers will see about an extra £150.

The changes were announced as part of the Treasury Minister's annual budget in February.

A representative said it meant car charges would be "primarily based on carbon dioxide emissions and the list price of the vehicle".

If people decide not to accept the company's offer to pay for fuel, they will not be charged.

Treasury Minister Alex Allinson said it was a "shift towards greener motoring", which was "strategically aligned with the goals set out in the Climate Change Plan".

He advised people in company car schemes to "familiarise themselves with the revised framework".

The change is the first to the calculation since 2009.