| About us |
|
|
|
| Information |
|
|
|
| Topics |
|
|
|
|
|
Taxable benefit of company cars |
Car benefit
Company cars are taxed in a variety of ways. All of them expensive.
If your car was registered on or after 1 January 1998 it will have a CO2 figure,
unless it was imported from outside the EC. You can find this on the V5. Once you
have the CO2 figure you just look up the relevant percentage on a table and multiply
it by the list price (including first registration fee and all accessories, but
excluding RFL, and before deducting any discount) of the car.
Fuel benefit
Fuel benefit is calculated by applying the relevant percentage, for cars with a
CO2 figure, by a set figure. For 2003/04 to 2007/08 the figure is £14,400.
An example
A car originally cost £19,000 after a discount of £1,000. The price included RFL
of £165 and first registration fee of £30. The list price is therefore £19,835. The CO2
figure is 197. The relevant percentage for the year ended 5 April 2005 is therefore 25%
and the annual taxable benefit is £4,958. If private fuel is paid for (in ANY amount)
the fuel charge is an additional £3,600.
In additional the employer pays Class 1A NI currently at a rate of 12.8% of the taxable benefit.
Older cars
The taxable benefit is based on list price and engine size. You multiply the list price
by one of 15% (up to 1,400cc), 25% (1,401cc to 2,000cc) or 35% (over 2,000cc or rotary
engines). However the percentages are increased by 3% for diesel engines subject to an
overriding maximum of 35%.
Fuel benefit is the set figure multiplied by the percentage benefit as for newer cars
Classic cars
Same as cars registered before 1 January 1998 but you can only use original list price
if the car is worth less than £15,000.
If you have a classic car that is over 15 years old and it's market value is less than
£15,000 then you are taxed as described above. The numbers are made up but here is an
example. You have a 1973 car which is in good condition and has an engine over 2 litres.
It is currently worth £10,000 but in 1973 its list price was £800. You use it for a small
amount of business. The taxable benefit on you is £280 per year. You sell it to your company
at its current value of £10,000 and it costs £2,000 per year to maintain and run. In the first
year the company can deduct costs of £4,500. Not bad against a £256 taxable benefit.
Beware any increase in market value. If the market value goes up because you spend money to
improve it or the market in that type of car improves and it becomes worth £15,000 or more
either on the last day of the tax year or on the last day the company provided it to you then
you are taxed based on the current value and not the original list price. Ouch!
You should really have some business use of the car to establish that it was necessary
for the company to buy you such a car.
|
|
Home |
Put a Link Here |
Put a Link Here |
Put a Link Here |
How to find us
|
|
 |
| Bicycles |
If you use a bicycle
for business travel you can claim up to 20p per mile tax free.
Wow! |
|
|
|
| Own car |
If you use your own
car for business travel you can claim 40p per mile for the 1st 10,000 miles and
25p per mile thererafter. The 40p rate starts again each 6 April.
Naturally MP's can claim a higher rate, than the peasants, tax free. |
|
|
|
| Motorbikes |
You can use a motorbike for business travel as well. You can claim 24p per mile. I do. |
|
|
|
|
|
|
