Company Car Tax – deciding to change your company car?
Date: 20th April, 2017 | Author: Cathy Corns | Comments: 0
The government has now confirmed the tax rates for company cars up to 5 April 2021. The changes highlight the discrepancy between the tax on a car with low to medium CO2 emissions compared to a car with high CO2 emissions. There has been no change to the maximum amount chargeable for the high emission cars, it is still at 37%. The impact of this can be seen in the following example:-
If you were driving a Ford Mondeo with a list price of £22,000 in 2014 the annual taxable amount would have been £3,300. If you keep this car in 2020 the annual taxable amount will increase to £5,940 (an increase of £2,640). On the other hand if you had a Range Rover with a list price of £55,000 in April 2014, your taxable amount would have been £19,250. In 2020 the annual tax amount for this car will be £20,350. A small increase of £1,100.
It is not only the employee that gets hit with the extra cost, employers have to pay class 1A NIC on the company car (and fuel benefit if provided).
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