2178
Views

Tax Efficient Cars

There are quite a few types of car which have CO2 emissions of no more than 110g/km; including certain models of the Mini Cooper, Toyota Prius, Smart, and Fiat 500. If your company buys one of these low emissions cars new (not second hand), it can claim a tax deduction for the full cost in the year of purchase and for all its running costs.

Where the car is provided to a director or employee of the company for their own private use, or for the use of a member of their family (perhaps for son or daughter), the director/ employee will be taxed on 10% of the list price of the car for petrol cars and 13% for diesels.

For example a Mini Cooper 1.6D has CO2 emissions of 104g/km and a list price of £15,730. The director/employee will be taxed on £2,045 per year, and if their top tax rate is 40% this will give in an annual tax bill of £818. The company will also have to pay class 1A NICs of £282 per year, but that cost is tax allowable for the company. The company can also pick up the full cost of all servicing and insurance for the car with no extra tax charges.

Rate:
 
Added By: Keith Roberts on 04th May 2011 - 16:00
Last Updated: 20th Jul 2011 - 12:43

Number of Views: 2178
Got A Question?

If our news items leave you with a question you need answering, let us know using one of the following:

  1. Call us on 01252 522221
  2. Email us
  3. Use our enquiry form
  4. Use the comments form below

We're happy to help.