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| Making company cars work for you |
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The normal situation
To drive a car that you actually want to drive, the tax on the Car and Fuel Benefit would normally be very high.
Often it works out better to own the car privately and claim mileage from the company – especially if you have high business mileage.
Cars with low emission levels
From 6/4/2008 all cars under 120g/km co2 emission levels will only be taxed at 10% of the list price (or 13% if diesel).
This might make it much more attractive for these cars to go through the company as Company Cars.
What cars fall into this category?
Please contact us for a full list but some of the more pleasant examples are as follows:
Mini Cooper D 1560cc Toyota Prius Hybrid 1497cc
Ford Fiesta Zetec 1.6 TDCi 1560cc Renault Megane 1461cc
Audi A3 1.9TDI 1896cc BMW 1 series 1995cc
Peugeot 207 SE 1560cc
and many more…..
Spouses….. or children of driving age
If your spouse is not a director or shareholder, you could provide such a car through the company, provided a) it can be justified as reasonable given the duties performed; and b) the car is useful for business purposes.
If the value of the car and fuel benefits, plus salary and other benefits, does not exceed £8500, there will be no tax to pay at all on the car / fuel benefits. But the company will be able to claim full corporation tax deduction for the costs and depreciation.
Example
Mini Cooper, list price £14190 1419
Fuel benefit 1690
Salary 5300
Total £8409
As the total is less than £8500 no tax or NI is payable on any of the above.
Part time employees
For someone earning in the region of £8500 you could offer to pay them a lower salary plus a company car – thus potentially avoiding the payment of any tax or NI.
It is important to get the calculation right, and also to document everything in a proper way, with a salary sacrifice form.
Please contact us if you’d like to know more.
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