Company Car Tax

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The rules for company car tax change from time to time and therefore, it is always worth looking into before you make a decision on a new company vehicle.


Although there are no further planned changes for 2017/18 it is always worth being aware of the tax implications of a company car.


To work out the tax rate of a car you must first understand is its carbon dioxide (CO2) emissions, as different emission level bands are taxed at different percentages of a vehicle’s value. HMRC refers to this as the P11D value and it is the HMRC-recognised list price of the car, including options added to the vehicle, including the first year’s road tax and vehicle registration fee but without non-taxable items.


If the car you’re interested in costs less to buy than the official P11D value, it won’t save you tax. This is because HMRC still says the Benefit in Kind value is the same. However, it is worth noting that if you have the car part-time or if you pay something towards the cost in the first place your company car tax charge will reduce.


It is important not to confuse company car tax bands with normal Vehicle Excise Duty car tax bands as these are two different things. In terms of Benefit in Kind company cars, the tax bands based on emissions.


Company car tax rates are determined by the amount of pollution emitted with the least polluting company car models. For 2017/2018, the lowest benefit-in-kind levy will be 9% for cars producing between 0-50g/km of CO2 and the highest will be 37% for those cars producing 190g/km or more.


The primary rate for capital allowances for company cars means that it is unlikely that anything with CO2 emissions more than 110g/km will be an option on a company’s car choice list.


If you’re a business looking for cars to put your staff into then here at Cocoon Vehicles, we may be able to help. We offer short-term and longer term leasing options on a wide range of vehicles and we serve a nationwide service. Why not speak to us today on 01332 290173 or complete the form below and we’ll be in touch as soon as we can.


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Rebecca joined the Cocoon Vehicles team in 2018 after running and selling a successful financial services business offering pension, investments and mortgages. Today, Rebeccas goal is to provide the best possible customer service along with news that you will want to read.

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