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 Below you can find information about all areas of Company Car Taxation. If you wish to use the HM Revenue & Customs Company car and car fuel benefit calculator please click here. The CO2 emission scale charges which are used to calculate company car benefit charges have been increased for 2008/09. The threshold for the minimum charge rate for calculating benefit-in-kind, on company cars, reduced from 140g/km to 135g/km. A new rate of benefit of 10% of list price on vehicles emitting no more than 120g/km has now been introduced. Please click here for a list of current vehicles available. The business will benefit from the capital allowance, and the driver will benefit from the reduced benefit-in-kind, leading to a further saving for the employer in Class 1A National Insurance contributions. To qualify emissions must be strictly no more than 120g/km. Cars that run on E85 fuel – a mixture of normal fuel and biofuel will attract a 2% discount. Company Car Private FuelThe scale charge figure for private fuel provided for company cars remains at £14,400 for 2007/08. The benefit in kind charge is calculated by applying the percentage determined by the CO₂ emission table above to £14,400. This puts the benefit in kind on free fuel for private motoring at between £2,160 and £5,040 for divers of conventionally fuelled vehicles.Car ParkingThe provision of free parking by the employer at or near the place of work is tax exempt. Employers can book spaces for their employees at public car parks and then provide them free to staff, and there is no tax or NIC charge on a benefit provided in this way.Company Van TaxationSince April 2007 the HMRC changed the laws on company van tax. If your employees are deemed to use vehicles privately their benefit in kind increased to £3000 per annum plus an additional £500 if you provide the fuel.If your employees have opted out of the scheme and refuse to pay the tax you will be required to prove mileage, byway of a vehicle log to justify no private mileage has taken place. A vehicle tracking system that relays information back to the depot were reports can be made available is possibly the best solution. VAT Fuel Scale ChargeWhere VAT is recovered on fuel in a car owned by the business it is necessary to pay an output tax charge to recognise the private use of the fuel. This applies to company cars where the driver incurs the fuel benefit charge, and also to the self employed. The fuel scale charges applying were amended in the 2007 budget and now also recognise the CO₂ emissions of the car, instead of being determined by the engine capacity. Many drivers will see a slight reduction in the VAT they pay as a scale charge, although those with diesel cars will suffer a small increase.Mileage RatesThe AMAP’s scheme permits the employer to reimburse employees for business mileage in a privately owned car. This scheme provides for statutory exemption, and also statutory deduction from income in respect of business miles travelled at the following rates:Approved mileage rates for private cars (pence per mile) Engine Size Up to 10,000 miles Excess over 10,000 miles All cars 40p 25p Company car fuel advisory rates (pence per mile) Engine Size Petrol Diesel LPG 1,400cc or less 9p 9p 6p 1,401cc to 2,000cc 11p 9p 7p Over 2,000cc 16p 12p 10p |
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