Time to go low? Michael LansdellFeatured Products Promotional Features
Posted by: The Probe 12th May 2019
A company car has long been seen as a company benefit, although you would still have paid tax on it if you used it privately and for your commute.
But there are tax changes on the horizon. The first change to note is the 3 per increase in tax percentages for company cars. This is going to apply across the board and it will start from 6 April this year.
Company car tax has been an emissions-based system since 2002. A percentage figure is applied to the list price of the car and that is based on fuel type and its CO2 emissions. The 2019/20 percentage charges are outlined below:
- For CO2 emissions of 0-50g/km, 16%
- For CO2 emissions of 51/75g/km, 19%
- For CO2 emissions of 76-94g/km, 22%
- For CO2 emissions of 95g/km and above, 23% plus 1% per 5g/km over 95g/km.
The maximum percentage is 37% (capped). Diesel cars will also incur a 4% surcharge unless they are diesel hybrids, or certified to the Real Driving Emissions (RDE2) standard. The 37% cap will still apply, too.
From April 2020, company cars will have their emission figures based on a new worldwide light vehicle test procedure (WLTP). WLTP tests fuel economy as well as emissions and is intended to be a more accurate way of measuring the impact that a vehicle will have on the environment.
Is it time to consider a low emissions car, or even a plug-in, electric one? From 6 April 2020, the percentage charge will be 2% for a car with zero emissions, or for an electric vehicle with CO2 emissions of 1-50g/km with an electric range of at least 130 meters. Electric range is the maximum distance it can travel in pure electric mode without recharging its battery/using the combustion engine and as the range gets shorter, the percentage increases.
So, is a company car worth it? If you don’t want a plug-in, a hybrid will have a lower emission rate than a petrol/diesel car. Talk through your options with a specialist financial accountant, such as the experts at Lansdell & Rose. You may be better off looking for tax relief elsewhere and taking a higher salary to buy the car personally.
For more information please visit www.lansdellrose.co.uk
or call Lansdell & Rose on 020 7376 9333.
No comments yet.
Sorry, the comment form is closed at this time.