Budget 2009 – Company Car Tax
There will be changes in the way company car tax is calculated from 6 April 2011. These changes have been designed to encourage the use of more environmentally friendly vehicles as well as to increase the company car tax on individuals who drive expensive cars with a list price over £80,000.
The three main changes are as follows:
- The lower threshold for CO2 emissions will be reduced from 130g/km (2010-11) to 125g/km(2011-12).
- The current cap of £80,000 on the list price that is used to calculate company car cash equivalent benefit will be abolished.
- Current discounts given to cars using alternative fuels (such as bi-fuels and bioethanol) will be removed. From 6 April 2011 the liability to company car tax will be based on the actual level of CO2 emissions.
In addition rules relating to electronically powered cars registered before 1998 will be repealed as these cars do not exist.