Company cars and vans
Electric cars and vans: benefit in kind
Employees and directors who are provided with a company car or van that is propelled solely by electricity will not have to pay tax on the benefit. The relief will apply for five years from 6 April 2010. Employers will not have to pay Class 1A national insurance contributions on such vehicles.
Fuel benefit tax
Employees who receive free fuel for private mileage in company cars or vans pay tax on a percentage (which depends on the vehicle’s CO2 emissions) of a basis figure currently set at £16,900. This basis figure will rise to £18,000 for 2010/11. The corresponding flat taxable amount for vans will rise by 10% to £550.
Benefit in kind charge for 2012/13
The graduated table of company car tax bands will be restructured from 6 April 2012, when the 15% threshold rate will fall to 120g/km as a result of 5g/km reductions in each of the next three tax years. The 10% rate will apply to company cars with CO2 emissions below 100g/km. An 11% rate will apply for cars with emissions of 100g/km, rising by 1% for each 5g/km thereafter.
Electric vans: capital allowances
Businesses that buy new, unused electric vans will be able to claim a 100% firstyear
capital allowance. The measure will apply to expenditure from 1 April 2010 for companies, and 6 April 2010 for sole traders and partnerships. This change is subject to confirmation of compatibility with the EU State aid rules.
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DON'T FORGET: If you are about to choose a new
company car, check the CO2 emissions against the next
three years benefit scales; they are due to change every year
and could increase your taxable benefit. |
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