Company Car Benefit

Whether buying or leasing your company car there is a lot of talk about going green, carbon footprints etc. HM Revenue & Customs have introduced a generous scheme to encourage small business owners to do more for the environment. The scheme concerns Company cars.

Prevously providing a company car to an employee has been very expensive from a tax point. However this is no longer for certain cars.

Those cars which have CO2 emissions of not more than 95g per kilometre driven qualify for 100% allowances within the Company “ this means that if the car costs £20,000 you can offset the whole amount against your Company profits in year 1.

Previously this would have been spread over at least 4 years. This can be a big help especially for businesses in their first few years of trading.

The company car tax paid by your employee is also reduced. Which is an added benefit when you are looking to take on new staff.

People used to worry about how much they were loosing on their salarys with company cars. With the new rulings on these types of cars at least it is not costing your employees masses in extra taxes.

Remember as well that you Company will pay for all the repairs, tax, business fuel and insurance on the car, reclaiming VAT where applicable and obtaining corporation tax savings on all costs.

CAR BENEFITS 2015/2016 – CARS WITH C02 EMISSION FIGURE*

(g/km) Petrol % Diesel %
1 to 75 5 8
76-94 11 14
95-99 12 15
100-104 13 15
105-109 14 17
110-114 15 18
115-119 16 19
120-124 17 20
125-129 18 21
130-134 19 22
135-139 20 23
140-144 21 24
145-149 22 25
150-154 23 26
155-159 24 27
160-164 25 28
165-169 26 29
170-174 27 30
175-179 28 31
180-184 29 32
185-189 30 33
190-194 31 34
195-199 32 35
200-204 33 35
205-209 34 35
210 and above 35 35
To help you choose which Company Car is best for you check out www.comcar.co.uk 

CARS WITH NO CO2 EMISSION FIGURE & CARS 1ST REGISTERED BEFORE 1/1/98

Registered before 1st January 1998 1400cc or less 1401cc -2000cc 2001cc and more Rotary engine
% rate 15 22 32 32
Registered after 1st January 1998 % rate 15 (Diesel+ 3%) 25 (Diesel + 3%) 35 35

CAR BENEFITS – CARS THAT RUN ON ALTERNATIVE FUELS & TECHNOLOGIES

Type of car Electric Only Hybrid Electric Gas Only Bi-fuel with CO2 Emissions figure Bi-fuel conversion or other bi-fuel not type B Cars manufactured for E85 fuel
Code E A A A A A
Discount from 6.4.11 Flat rate 9% None None None None None

FUEL BENEFIT CHARGE – Based on CO2 emissions. Charge to be multiplied by a set figure for the year 2014/2015 £21,700 (previously 2013/2014 £21,100).

Example: A car that has a CO2emissions of 195 g/km. % used to calculate car benefit is 32% for 2014/2015 the fuel scale charge will be 32% x £21,700 = £6,944.

Cars registered before 1/1/98 and cars with no CO2 emissions figure. % figure to be used is the same as used for Car Benefits. Class 1A NIC due.