Thinking about getting a new company car this year? If yes, listen out for these buzz words, electric, 75g/km and diesel.
Electric cars will no longer be tax free
From 06 April 2015, cars with extremely low emissions of 0 – 50g/km will have a starting tax bracket of 5%. This means that even electric company cars will now have tax charges, albeit at the lowest level, where before there was no tax, the table above shows the rise in the actual tax charges for electric cars.
The upward trend in company car tax rates has been maintained
There will be a 2% rise in benefit in kind rate for all cars over 75g/km starting in April 2015 and has been forecasted until 2018/19 tax year by which time the minimum benefit in kind rate for cars over 75g/km will be 19% compared to 11% in 2014/15.
The highest rate will also increase in April 2015 to 37% from 35%.
But diesel drivers will be better off
The government has announced that it is to scrap the current 3% extra benefit-in-kind tax paid by drivers of diesel company cars from April 2016. The move means Diesel Company cars will be taxed at the same rate as petrol.
If you’re thinking about changing your company car(s) or need ideas on how you could reduce the tax burden on your existing company car(s) – we are here to help, here is a link to our company car calculator
If Company cars are less attractive to you now, then why not one of these tax free benefits;
Perk Key rulesMobile1111 One per employee. Contract must be in employer’s name. Unlimited calls/texts but employer may set limit on use or request contribution for private calls.Bicycle1111 Providing employee uses it for work/getting to and from work. Employer can reclaim VAT and obtain capital allowances on costCheap loan 1111Up to £10,000 p.a. no tax charge.Encouragement award 1111 An award made for a suggestion which has some special merit or reflects praiseworthy effort on the part of the person making the suggestion. The permitted maximum for an encouragement award is £25.Long service award 1111 Given to employees to mark long service where the service is 20 years or over. The award can equate to £50 for each year of service. Personalised number plate 1111 May be included with a company car without creating any additional tax charges
Please note – whilst care has been taken in preparing this publication it is for information only. It is not and should be construed as advice and accordingly no reliance should be placed on the information.