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| GK Group have posted this advice as a guide to drivers with Company cars, for a full assessment of your individual company tax liability you should seek advice from a qualified tax advisor |
INCOME TAX ON COMPANY CARS |
| The following information has been provided as a guide only
by BARBER HARRISON AND PLATT Chartered Accountants 57 - 59 Saltergate, Chesterfield S40 1UL Tel: 01246 232121 Fax: 01246 201359 www.bhp.co.uk |
As from 6th April 2002 the benefit in kind charges will be based on a cars cash price and the level of carbon dioxide emissions without any discount for the age of the car or high business mileage. The Vehicle Certification Agency provides a guide to the CO2 emission figures of all new cars. This can be found on the internet at www.vcacarfueldata.org.uk The percentage of the car's tax to be taxed in the first 3 years of the new system are as follows: |
| CO2 Emissions in grams per kilometre | % of car's price taxed | |||
| 2003/4 | 2004/5 | 2005/6 | Petrol | Diesel |
| 155 160 165 170 175 180 185 190 195 200 205 210 215 220 225 230 235 240 245 250 255 |
145 150 155 160 165 170 175 180 185 190 195 200 205 210 215 220 225 230 235 240 245 |
140 145 150 155 160 165 170 175 180 185 190 195 200 205 210 215 220 225 230 235 240 |
15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 |
18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 35 35 35 |
* It is proposed to bring relief, so that the increased diesel percentages will not apply if the car meets the clean level of Euro IV Standard emissions. For environmentally friendly cars, reductions in the above petrol percentage rates will be as follows: |
| Electric Cars Hybrid cars (electric/petrol). |
6% (making an effective rate of 9%) 2% +1% for each 20 grams per kilometre by which the CO2 emissions fall below the lower threshold in the table above. |
|
| Road fuel gas/bi-fuel registered on or after 1st January 2000. | 1% + 1% for each 20 grams per kilometre by which the CO2 emissions figure falls below the lower threshold in the table (taking the lower emissions figure of the two fuels). | |
| Bi-fuel cars registered between 1st January 1998 and 31st December 1999 | 1% | |
For cars registered before January 1998, there is no official CO2 emissions data. Cars will be taxed according to their engine capacity as follows: |
| Engine Size (cc) | % of Car's price charged to tax |
| 0 - 1400 1401 - 2000 2001 and more |
15% 22% 32% |
For electrically propelled cars, the percentage is set at 15% Classic Cars The benefit of classic cars is based on the market value rather than on list price. Classic cars are defined as those over 15 years old at the end of the tax year (or, if earlier, when the car was last available to the employee) and when the value at that time was in excess of £15,000. Contributions Contributions by the employee for private use reduce the benefit pound for pound . A capital contribution by the employee towards the cost of the car may be deducted from the list price of the car, up to a limit of £5,000. Replacement Cars Where a car is unavailable for a period of 30 days or more the scale charge is proportionately reduced. If the car is unavailable for less than 30 days and a replacement car is provided , that car is ignored and business mileage travelled in it is regarded as travelled in the original car. Employee's tax returns Employees must make quarterly returns of changes in company cars provided on forms P46(car) to enable PAYE codes to be kept as up to date as possible. There are penalties for failure to comply. |
Points to remember
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