Diesel car supplement increase takes effect

Newsletter issue - May 2018.

The rules for taxing petrol company cars apply equally to diesel cars, but the latter are then subject to further adjustment.

The taxable benefit arising on a car is, broadly, calculated using the car's full manufacturer's published UK list price, including the full value of any accessories. This figure is multiplied by the 'appropriate percentage', which can be found by reference to the car's CO2 emissions level using HMRC's ready reckoner. This will give the taxable value of the car benefit.

For cars that are 'propelled solely by diesel', a supplement of 3% is normally added to the 'appropriate percentage', although, from 2015/16 onwards, the maximum cannot rise above 37% (previously 35%).

The diesel supplement was due to have been abolished from 2016/17. However, the 2015 Autumn Statement announced that the abolition would be deferred, meaning that the 3% diesel supplement continued to apply to all diesel cars registered on or after 1 January 1998.

At the time of the Autumn Statement, it was announced that the diesel supplement would remain until 2020/21, although, since the legislation currently contains no provision for its withdrawal, the date remains unconfirmed.

However, legislation contained in the most recent Finance Act (Finance Act 2018, s. 9) increases the diesel supplement to 4% (from 3%), with effect from 6 April 2018. This is still subject to the overall upper limit of 37%.

The increase applies to all diesel cars first registered from 1 January 1998 to 31 August 2017.The increase also applies to diesel cars first registered from 1 September 2017 that either do not meet, or are not certified against new standards for nitrogen oxide (NOx) emissions under the Real Driving Emissions (RDE2) regime (known as 'Euro 6d'), or which do not have a certified NOx emissions figure under RDE2 standards.

The diesel supplement does not apply to cars registered after 1 September 2017 if their certified NOx emissions meet the new standard. However, diesel cars registered on or after 1 September 2017 will be subject to the 3% diesel supplement for the period 1 September 2017 to 5 April 2018 irrespective of their NOx emissions value.

What our clients say about us...

  • "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."

    ALISTAIR FAIRWEATHER - PROGRAMME & PROJECT MANAGER, DELIVERING/RESCUING I.T. 7 BUSINESS CHANGE WITH BUDGETS UPTO £50M INC SUPPIER MANAGEMENT

  • "I couldn't ask for more from Paul as an Accountant. Paul has been accountant to Work Relief Charity Recruitment for just over a year now and is proving an invaluable asset. Accurate, knowledgeable, flexible with an emphasis on service delivery, I would recommend Paul's services to any organisation looking for an accounts professional."

    Neil Price - Managing Director at Work Relief Charity Recruitment

  • "Paul was a referral from a family member when I started my business 2 years ago. As this was the first time I had ever run my own company I was totally clueless over the financial side of matters and was worried that I may have made mistakes in any of my accounting. I needn't have worried as after enaging Paul for a set monthly fee he was always there on the end of the phone for all sorts of questions I had and no matter how trivial they were Paul gave me all the information I required and more and did an excellent and painless job at the end of my first year! Couldn't ask for any better to be honest. Just two words - hire him!!!"

    Lee Westrap MBCS - Director - Bulldog IT Services

Request a Callback
Please complete our form
to request a callback
Get a Fixed Quote

Competitive fixed quotes
for agreed services

Find out how to Make more, Keep more and Work less

Increase your profit and
reduce tax liabilities

Your Business Size?

Expert advice for your
business size

 

Marker

Booth & Co  |   The Hermitage  |   15a Shenfield Road  |   Brentwood  |   Essex  |   CM15 8AG        Telephone: 01277 224666    |   Email: info@boothandco.co.uk