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Company car tax is calculated by multiplying the list price with the appropriate percentage based on the CO₂ emissions of the car. The employee pays income tax on this figure and the company pay Class 1A National Insurance on it. Often automatic cars have a higher list price and CO₂ emissions than equivalent manual cars.

Currently disabled company car drivers of automatic cars who hold a blue badge are able to use the CO₂ emissions figure of an equivalent manual car when calculating their company car benefit charge. From 6th April 2009 they can also use the list price of an equivalent manual car.