COMPANY CARS

The Budget proposes even more changes to the company car regime – but this is mostly good news as the income tax charge on the benefit for private use is being reduced if the car has low CO2 emissions. That mirrors the policy used for road fund tax.

The income tax charge on the benefit of having a company car for private use has in fact now been announced for all tax years up to and including 2012/13 (indeed to 2014/15 in some cases). As such, a robust tax strategy can now be established and we will be pleased to become involved in this for you.

The level of CO2 emissions qualifying for the basic minimum 15% charge is 130 g/km for 2010/11; 125 g/km for 2011/12; 120 g/km for 2012/13. That’s the bad news, but there is a lower charge of 10% of list price where CO2 emissions do not exceed 120 g/km, reducing to 99 g/km from 2012/13.

There is an even lower charge of 5% where CO2 emissions do not exceed 75 g/km from 6 April 2010 to 5 April 2015. However, the April 2010 edition of What Car? does not report any car within that range! One for the future, then.

From 6 April 2010 right through to 5 April 2015 the tax charge is on NIL where the company car or van cannot produce CO2 emissions under any circumstances when driven. This is basically an electric vehicle and does provide some real tax saving opportunities in the right circumstances.