Car benefit changes
A number of changes to the tax calculations for company cars have been announced over the last few months and during the Budget.
For the current 2009/10 tax year, there are changes for disabled drivers who are required to drive an automatic car as their company car. The new rules will allow qualifying employees to use the list price of an equivalent manual car when calculating the company car tax benefit. Also, from this year the requirement for a new P46 (car) form is withdrawn where an employee’s car is returned and replaced with another car.
From 2010/11 the lower threshold for CO2 emissions figure will be reduced to 130g/km (from 135g/km).
From 2011/12 the lower threshold for CO2 emissions figure will be reduced to 125g/km. In addition, the current £80,000 list price cap used to calculate the company car tax will be abolished and current discounts given to cars using alternative fuels (such as bi-fuels and bioethanol) will be removed.