Skip to content

ACCA Strategic Professional · Advanced Taxation (UK) · Alternative ways of achieving personal or business outcomes and their tax consequences

Zara is provided by her employer with a new electric company car with zero CO2 emissions and a list price of £40,000. Using the car benefit percentage for zero-emission electric cars in the ATX-UK tax rates and allowances for Finance Act 2025, what is her annual taxable car benefit?

The taxable benefit is £1,200. Zero-emission electric cars use a 3% car benefit percentage, and 3% of the £40,000 list price gives £1,200. Higher percentages such as 17% or 6% apply to petrol cars or hybrids, not to zero-emission electric cars.

  1. A£1,200Correct
  2. B£4,000
  3. C£2,400
  4. D£6,800

Explanation

The car benefit percentage for an electric car with zero CO2 emissions is 3%. £40,000 × 3% = £1,200. £6,800 wrongly applies 17%, the percentage for a 55 g/km petrol car. £2,400 uses the 6% hybrid band.

Did you get it right without looking?

One question tells you little. A timed set on Alternative ways of achieving personal or business outcomes and their tax consequences shows your real accuracy, how long you take and where you lose marks.

Practise Alternative ways of achieving personal or business outcomes and their tax consequencesFree diagnostic mock

More Alternative ways of achieving personal or business outcomes and their tax consequences questions