|
Passenger Cars
As from April 2002, there has been a fundamental change in the way company passenger cars are taxed to help protect the environment. Cleaner more fuel-efficient cars will be rewarded by linking the tax charge to the car's exhaust emissions; in particular it's carbon dioxide emissions.
The previous allowances and reductions for business mileage and older cars will no longer apply.
The starting point for calculating the benefit charge will continue
to be the list price of the car (plus accessories) - this is commonly
referred to by the Inland Revenue as the P11D price of the car.
However, the percentage of the P11D price actually charged to tax
will depend on the car's CO² emissions. It applied to most
cars from the 6th of April 2002, with the exception of:
- Vehicles imported from outside the EC which may not have CO² emissions ratings
- Older vehicles for which the CO² emissions rating is not known (The taxable benefit in such cases will be based on engine size)
The normal minimum charge will be on 15% of the car's P11D price and the maximum charge will be on 35% of the car's P11D price. There will also be a supplement of 3% for diesel cars, but this will not increase the level of the maximum charge above 35%.
Invariably, diesel cars produce lower CO² emissions than similar
sized petrol equivalents which is why diesel fuelled vehicles have
become so popular with business drivers in the last couple of years.
For full details of the current legislation visit http://www.hmrc.gov.uk/calcs/cars.htm
For assistance in calculating your tax liability please see this document Company Car Guidance & Calculator
If you wish to check the official CO² emissions your current or proposed future vehicle produces you can do so by visiting:
http://www.vcacarfueldata.org.uk/search/search.asp
|
