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Company cars
Newsletter issue - March 2015.
Does your company still own or lease the car you use for private journeys? You may need to rethink that arrangement in light of the tax charges due to apply in the years ahead.
From 6 April 2015 all company cars will generate a tax charge for the driver and the employer, even electric cars will be taxed on 5% of their list price. The taxable benefit for other low emission vehicles (51-75g/kg) will leap up from 5% to 9% of the vehicle's list price. The taxable benefit for all other cars will also increase by two percentage points. The taxable benefit for high emission cars (over 210g/km), will increase from 35% to 37% of the list price.
In 2016/17 all company car drivers will suffer another 2% hike in taxable benefit, except for those which are already taxed at the maximum of 37% of the car's list price. From 2017/18 the tax shoots up again, as for each extra 5g of CO2 emissions the taxable benefit increases by two percentage points of the list price. "Classic" cars with no recorded CO2 emissions will also be hit with increased taxable benefit charges.
Say you were provided with a new Lexus NX 300 H Sport on 5 April 2014. Its list price is £40,000, and it has a CO2 emissions rating of 121g/kg. If you keep the car for four years you will be taxed 80% of its initial value:
Tax year: |
Taxable benefit: |
2014/15 |
£6,800 |
2015/16 |
£7,600 |
2016/17 |
£8,400 |
2017/18 |
£9,200 |
total |
£32,000 |
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"Paul has provided accountancy services to my company for 2 years now. I can recommend Paul very highly; his skills as an accountant are highly detailed and professional and he is always available to provide advice. One aspect of the way Paul works that I greatly appreciate is a preference to meet face to face when there is a detailed conversation to be had. I personally find this more productive and is a benefit of working with a small accountancy firm that you wouldn't get with the large faceless providers."
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