Rates & Allowances - 2007 / 2008
Vehicle Benefits
Chargeable
on employees earning £8,500 or over (including benefits), and directors.
Car Benefit
The
tax you pay on your company car is governed by four factors:
q the list price of the car, on the day before it was first registered,
plus certain accessories,
q the rate at which the car emits carbon dioxide (CO2),
q the fuel type
(for most types of car, this is all the information
you need to work out the taxable benefit)
q your highest rate of income tax.
You
can find your taxable percentage for 2007/08 using the following table:
|
CO2
in g/km |
Taxable
% |
CO2
in g/km |
Taxable
% |
CO2
in g/km |
Taxable
% |
|
Petrol |
Diesel |
Petrol |
Diesel |
Petrol |
Diesel |
|
Less
than 145 |
15% |
18% |
175
to 179 |
22% |
25% |
210
to 214 |
29% |
32% |
|
145
to 149 |
16% |
19% |
180
to 184 |
23% |
26% |
215
to 219 |
30% |
33% |
|
150
to 154 |
17% |
20% |
185
to 189 |
24% |
27% |
220
to 224 |
31% |
34% |
|
155
to 159 |
18% |
21% |
190
to 194 |
25% |
28% |
225
to 229 |
32% |
35% |
|
160
to 164 |
19% |
22% |
195
to 199 |
26% |
29% |
230
to 234 |
33% |
35% |
|
165
to 169 |
20% |
23% |
200
to 204 |
27% |
30% |
235
to 239 |
34% |
35% |
|
170
to 174 |
21% |
24% |
205
to 209 |
28% |
31% |
240
and over |
35% |
35% |
|
How
to find out how much CO2 your company car emits – see:
Reliable
emissions data is not widely available for cars registered before 1 January 1998. For them, the following taxable percentages
apply, regardless of fuel type:
|
Engine capacity |
Taxable
% |
|
Up to 1400cc |
15% |
|
1401 - 2000cc |
22% |
|
Over 2000cc |
32% |
|
Car fuel benefits
If
the employee pays for the full cost of all fuel for private journeys (usually including home to work) there will be no car
fuel benefit. In all other cases the full tax charge will be due.
The
taxable car fuel benefit, for 2007/08, is calculated by multiplying £14,400 by the same percentage as applies (or would apply)
for the car benefit.
Example:
A company car driver has a car that, on the day before it was first registered, had a list price of £18,000. It runs on petrol,
and emits 182 g/km of CO2.
If
we assume the driver pays tax at 40%, the annual tax bill on the car is: £18,000 x 23% x 40% = £1,656
If
the employer provides any fuel used for private journeys and is not re-imbursed for the cost, the 2007/08
tax bill for the fuel is: £14,400 x 23% x 40% = £1,324.80.
Company vans
From
6 April 2007 the taxable benefit for the unrestricted use of company vans will be £3,000 (with no reduction for older vans)
plus a further £500 of taxable benefit if fuel is provided by the employer for private travel.
The
maximum tax payable on the use of a company van will therefore increase from April 2007 from £200 to £1,400 p.a., and the
employer's Class1A NIC payable will increase from £64 to £448 p.a.
Van drivers can avoid a benefit charge if they agree not to
use the van for personal journeys. Driving to and from work is acceptable so long as there is a reasonable amount of business
use.
