IF you want to know the company car tax banding of your next company car, then use our company car tax tables to help you.

The company car tax table shows the CO2 emissions band groupings in the left hand column. To the right are the benefit in kind percentages that are applied to the P11D value of your chosen company car each tax year.

To use the company car tax table you need

The CO2 emissions of your chosen company car

Your company car’s P11D value. The P11D is its ‘recommended on the road’ (ROTR) price including the full cost of any options added, as well as accessories over the value of £100 – less the first registration free and vehicle excise duty.

The fuel that your company car runs on – because until 2016 tax year, diesel cars are subject to a 3% company car tax surcharge (but not applicable to diesel hybrid vehicles)

To work out your company car tax, multiply the BIK percentage rate by your car’s P11D value to give you your benefit in kind. Then multiply your benefit in kind by your marginal rate of tax 20% or 40%.

If your company car’s CO2 emissions fall between bandings, round the number down to work out the company car tax band.

Company car tax tables

Changes in company car tax to note

Zero Carbon / Ultra Low Emissions Cars. From April 2015, zero carbon car five-year benefit in kind exemption ends and the lower company car tax rate for ultra low emissions company cars ends. From the 2015/16 tax year zero and ultra low emission cars will have two new bands: 0-50g/km and 51-75g/km.

From April 2016 3% diesel surcharge abolished

From 2015 a new top rate of company car tax rate for those cars with the highest CO2 emissions rises from 35 per cent of the list price to 37 per cent

IN the Budget the Chancellor announced new emissions bands for company car tax for ultra low emission vehicles and confirmed the 3% diesel levy is coming off the company car tax menu.

These ultra low emission company cars cover the 0g/km, 1-50g/km and 51-75g/km tax bands.

The market for these vehicles is fragile, especially for use as company cars but with improvements in technology, especially range, in mind the Chancellor is trying to encourage take-up. However, many companies have little confidence in the projections for the costs, especially in terms of residual value, and take up so far, has been low.

The Chancellor also announced that he would be providing support to UK based manufacturers of ultra low emission vehicles through the tax system.

The current 3% additional levy on diesel engined cars is to be scrapped from 2016/17. The government has now committed to publishing changes in the tax bands for up to three years ahead in order that drivers are able to make informed choices for their next company car.

THE Chancellor announced in his Budget that first year allowances (FYA) for ultra low emission vehicles (ULVs) will be extended until 31 March 2018.

The current allowance had been due to terminate on 31 March 2015.

The Chancellor is hoping to improve the current tenuous take up of such vehicles.

But, from 1 April 2013 the emissions threshold below which cars are eligible for the allowance will drop from 110g/km to 95g/km.

However, the tax break drops again from April 2015, when it falls from 95g/km to 75g/km.

For SMEs who rely on leasing their business cars, an even bigger change is that leased cars will no longer be eligible for the 100% first year allowance – and the Budget has left this untouched.

The effect will be to raise the business lease rental cost of such cars by about £15 a month.

Many SMEs rely on leasing for their business vehicles and the removal of low emitting vehicles could potentially lead them to choose cars that are cheaper than ULVs but with higher emissions. This could well cause a backward step in the move to greener motoring that the government is supposed to be encouraging.

For business cars on the main rate, a reminder that there will be no transitional arrangements for capital allowances as it reduces from 160g/km to 130g/km from April 2013. Also the threshold above which the 15% Lease Rental Restriction applies also reduces from 160g/km to 130g/km.

IF you want to know the company car tax banding of your next company car, then use our company car tax tables to help you.

The company car tax table shows the CO2 emissions band groupings in the left hand column. To the right are the benefit in kind percentages that are applied to the P11D value of your chosen company car each tax year.

To use the company car tax table you need

• The CO2 emissions of your chosen company car
• Your company car’s P11D value. The P11D is its ‘recommended on the road’ (ROTR) price including the full cost of any options added, as well as accessories over the value of £100 – less the first registration free and vehicle excise duty.
• The fuel that your company car runs on – because until 2016 tax year, diesel cars are subject to a 3% company car tax surcharge (but not applicable to diesel hybrid vehicles)

To work out your company car tax, multiply the BIK percentage rate by your car’s P11D value to give you your benefit in kind. Then multiply your benefit in kind by your marginal rate of tax 20% or 40%.

If your company car’s CO2 emissions fall between bandings, round the number down to work out the company car tax band.

Company car tax tables

Changes in company car tax to note

• Zero Carbon / Ultra Low Emissions Cars. From April 2015, zero carbon car five-year benefit in kind exemption ends and the lower company car tax rate for ultra low emissions company cars ends. From the 2015/16 tax year zero and ultra low emission cars will have two new bands: 0-50g/km and 51-75g/km.
• From April 2016 3% diesel surcharge abolished
• From 2015 a new top rate of company car tax allowance for those cars with the highest CO2 emissions rises from 35 per cent of the list price to 37 per cent

What if my company car doesn’t have a CO2 figure?

You need to apply the following company car tax table which is based on engine size

• 0-1400cc: 15% (petrol, gas and conversions); 18% diesel
• 1401-2000cc: 25% (petrol, gas and conversions); 28% diesel
• Over 2000cc: 35% (petrol, gas and conversions); 35% diesel

A small business company director wants to know the correct business mileage rate for paying staff in their own cars

RECENTLY my employees have been moaning about the pence per mile rate I pay them for business mileage. At 25p a mile is this too little and should I be paying them more?

THERE is no right or wrong on this. The actual Approved Mileage Allowance Payment is 45p per mile (from 06 April 2011, 40p until that date), and this can be claimed tax-free by your staff. Although, given the cost of fuel, it is perhaps not surprising that your staff are feeling slightly shortchanged and grumpy.

However, if you pay less, you should make it clear to your staff that they can claim the difference between what you pay – in this case 25p – and the Approved Mileage Allowance Payment (AMAP), which is 45p for the first 10,000 miles: so in your example it is 20p per mile. This relief is called Mileage Allowance Relief.

Both from the perspective of your staff – and you as an employer – there is no tax payable, as long as the approved amount is not exceeded. Beyond 45ppm the employee’s excess will be liable to tax and the excess to National Insurance.

AMAPs can only be paid for business journeys undertaken in a private car. These include journeys made between premises or journeys made to a temporary workplace.

AMAPs can be paid for staff using their own car (45p per mile for the first 10,000 miles, 25p per mile thereafter); if they take a passenger, add an additional 5p per mile; for motorcycles it is 24p per mile; and for cycles 20p per miles.

The allowance is a personal one. So if a staffer changes their car during the tax year, the AMAP allowance does not re-set to zero on the new car.

THE CO₂ emissions limits for company car writing down allowances are set to change radically from April 2013.

The 160g/km CO₂ limit for company purchased cars, with a writing down allowance of 18%, is reduced to 130g/km. Currently, cars with CO₂emissions greater than 160g/km qualify for a special writing down pool and are subject to an allowance of only 8% a year. From April 2013, this 8% rate will apply to all purchased company cars over 130g/km.

Tell me more about writing down allowances

Cars bought (but not leased or contract hired) by your company with CO₂ emissions of less than 160g/km qualify as ‘main pool’ cars. The cost of all such vehicles is added to a single pool which can then be depreciated or written down by 18% per annum on a reducing balance basis.

Why has there been a change in the writing down allowances?

This huge drop in CO₂ limits has been forced on the government because of the success of car manufacturers in reducing company car CO₂ emissions. In turn this has meant a substantial drop in revenue. The government needs more money; and wants to persuade small businesses to purchase even lower CO₂ emissions company cars through these fiscal changes.

What is the new 100% writing down allowance for cars?

There are radical changes too, for very low emission vehicles which qualify for a first year writing down allowance of 100%. From April 2013, the level at which a vehicle qualifies as a very low emission vehicle reduces from 110g/km to 95g/km. From April 2015 the 100% writing down allowance is removed altogether.

Anything else I should be aware of?

The main impact of the change in writing down allowances will be on cars with emissions between 130g/km and 160g/km. If you order, or commit to buy, the car before 1st April 2013 the 160g/km company car tax allowance limit will apply even if it’s not delivered or paid for. If it’s after 1st April then the new writing down allowance rules apply.

HMRC has announced new company car mileage rates to be used from March 01, 2013.

The new company car mileage rates (known as Advisory Fuel Rates, or AFRs) can be used for all journeys from 01 March, says HMRC, to reimburse business mileage undertaken by company car drivers.

And company car drivers get some relief from the cost of fuel at the pumps.

Well, there’s relief for those drivers with diesel company cars below 1600cc: for them the new company car mileage rates rise by 1p per mile to 13p.

For the rest (LPG apart), there’s no change – as has been the case since March 2012, which witnessed the last rise.

Drivers of diesel hybrid company cars should use the diesel figures; drivers of petrol-electric hybrid cars should use the petrol figures.

New company car mileage Advisory Fuel Rates from 01 March 2013 for petrol and LPG cars

• Engine size 1400cc or less: 15p (petrol); 10p (LPG)
• 1401cc to 2000cc: 18p (petrol); 12p (LPG)
• Over 2000cc: 26p (petrol); 18p (LPG)

New company car mileage Advisory Fuel Rates from March 2013 for diesel cars

• Engine size 1600cc or less: 13p
• 1601cc to 2000cc: 15p
• Over 2000cc: 18p

Parking fines: know your rights
The BVRLA has received a number of queries in the last few weeks from members who have encountered councils and private parking operators that demand payment for road traffic offences, even when details of the customer who committed the offence have been provided.

These cases involve people without a UK address, with the councils claiming that rental companies bear responsibility for customers based abroad.

“The legislation only requires rental companies to provide the address of the hirer. There is nothing in the law that requires rental companies to provide a UK address, so rental companies should challenge councils on this basis and go to appeal if the council persists,” said BVRLA legal and policy executive Amanda Brandon.

Private parking operators also appear to be attempting to charge rental and leasing companies if customers whose details have been disclosed do not pay parking charge notices. As this is contrary to the Protection of Freedoms Act 2012, the BVRLA advises companies approached in this way to challenge the private parking operator.

HM Revenue & Customs has advised the leasing industry that finance leases will continue to be treated as a supply of services and maintain their current VAT status.

HMRC had been asked to clarify its position following a recent ruling in the European Union Court of Justice which suggested that supplies under a finance leasing agreement may be supplies of goods rather than supplies of services, because the risks and rewards of ownership largely pass to the hirer.

The HMRC briefing note also confirmed that, were its tax policy to change at a future date, it would not be applied retrospectively. More details are available in the HMRC briefing note, which can be read here.

An investigation by BBC 5 Live has revealed that insurers may increase premiums for drivers who have opted to attended a speed awareness course after being caught speeding instead of accepting points on their licence.
Insurance firm Admiral has begun treating speed awareness courses as though they were convictions and increasing costs as a result.
The company justified its actions by claiming drivers caught speeding were statistically more of a risk and speed awareness courses did not change that.
However, police forces and local councils maintain that attending the courses does not affect insurance premiums, while a spokesperson for the Association of British Insurers told BusinessCar that drivers are not obliged to disclose whether they have attended a course unless they are specifically asked by their insurer.
The Association of Chief Police Officers told the BBC that Admiral’s move could be detrimental to road safety, while a spokesperson for driver training firm AA Drivetech said: “It’s absolutely clear that such courses reduce the likelihood of re-offending and therefore attendees are less likely to be involved in a crash.”
“I hope that other insurers don’t start penalising those who do attend them: it will undermine much of the important progress being made to improve road safety.”