Company cars may be charged as a benefit in kind on up to 35% of the list price of the car and its accessories. In many instances the list price is considerably more than the actual cost of the vehicle. With a high emissions car, that is changed every three years, an employee may have been taxed over the three years on more than the vehicle list price (which in turn may be considerably more than the actual cost). That seems a little odd, to say the least!
As manufacturers have achieved improvements in the level of CO2 emissions the Government has changed its thresholds. In 2012/13 the scale charge starts at 15% for a vehicle with CO2 emissions at 120 grams per kilometre and increases by 1% up to a maximum of 35% with each 5 grams per kilometre increment. Next year, that threshold will drop to 115 grams per kilometre.
The benefit in kind on an employee who has the private use of a vehicle is intended to be a deterrent. Accordingly, if a car is made available at all to an employee, it is automatically deemed to be available for private use unless there is a specific prohibition on private use and there is no actual private use made of the vehicle. If the car is available for private use, even if it is not so used, a benefit will be charged.
Date: 3rd September, 2012
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