Company car benefits – motor trade
Changes have been announced to the new rules for calculating tax on company cars which are due to take effect from 6 April 2009. HMRC have announced a simplification tothe original proposals which were published last year.
The original proposals, which primarily afect those employed in the motor trade, included a requirement foremployers to identify all cars available to employees for private use at each company location. Once identified, the business had to allocate those cars to groups and then calculate the average car in each group from the cars in each location.
The simplification which has been announced by HMRC allows the calculation to be done by group and removes the need for the allocation to be also done by location. The use of this simplification is at the employers discretion. Businesses will still need to identify the number of cars available at each location.
Businesses can also use calculations using groups of locations if this is more straight-forward.