BIK tax system
As you are probably aware if you drive a company car 'Benefit in Kind Tax' is now calculated on emissions as opposed to mileage driven. Use the scale charge calculator below to calculate the tax you will pay on your company car.
Once you know the CO2 emissions of your car look across the calculator for the % of list prices figures. Simply carry out the following calculation: List Price (P11D value) of car x % of list price x rate you pay tax at = Amount of tax you pay this year, ie; The calculation for a basic rate tax payer driving a £15000 petrol car with CO2 emissions of 210g/km is as follows:- £15000 x 29% = 4350 x 22% = £957 benefit in kind tax payable per year.
For further details on this or any other issues concerning 'BIK Tax' call Balgores Leasing now on 01708 384451.
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Scale Charge Calculator
2007/08 % of List
140 15*
145 16*
150 17*
155 18*
160 19*
165 20*
170 21*
175 22*
180 23*
185 24*
190 25*
195 26*
200 27*
205 28*
210 29*
215 30*
220 31*
225 32*
230 33**
235 34***
240 35****
Note that the given CO2 emissions figures for the car should be rounded down to the nearest 5 grams per kilometre.
* add 3 % if car runs solely on diesel
** add 2 % if car runs solely on diesel
*** add 1 % if car runs solely on diesel
**** maximum charge so no diesel supplement
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Budget 2005 News
All diesel cars registered after 1/1/06 must be Euro IV compliant
Euro IV diesel cars registered after 1/1/06 will not benefit from the 3% supplement waiver
Lowest 4 bands of Vehicle Excise Duty (Road Tax) frozen. Two most polluting bands will increase by £5 as will vehicles registered pre March 2001 over 1549cc.
Fuel Duty will rise in line with inflation and deferred until 1/9/05.
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Company van tax to rise 600% - but 85% of drivers exempt
Benefit-in-kind tax on company vans used privately will increase by 600% from April 6, 2007. However, the reform of company van tax starts from April 6, 2005 when employees who have to take their van home (for example, who are on call) and are not allowed any other private use will be exempt from any tax charge. As a transitional measure, the benefit-in-kind charge of £500 (£350 for vans over four years old) will be continued for all vans where private use is unrestricted. From April 6, 2007 the scale charge for unrestricted private use will increase to £3,000 and if an employer provides fuel for unrestricted private use an additional fuel charge of £500 will apply. But, the Government says that the shake-up will take 85% of employees who currently pay a charge out of the system as for the vast majority of van drivers there is restricted private use. The changes follow a consultation exercise on van tax changes held last year.
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Company car tax frozen for 2006-2007
Company car tax scale charge percentage rates for 2006-2007 have been frozen at their 2005-2006 level. That means that the driver of a petrol-engined company car emitting 140 g/km of CO2 will face a 15% tax charge in both 2005-06 and 2006-07. An initial evaluation report on the company car tax system introduced in April 2002 will be published shortly.
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Fuel benefit charge frozen
Fuel benefit tax paid by employees who use fuel privately that is paid for by their employer have had the ‘set figure’ on which the charge is based frozen for 2004-05. That means the tax will continue to be based on the 2003-04 figure of £14,400.
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VED and AMR rates frozen
Vehicle Excise Duty rates for all vehicle have been frozen at current levels. There are also no changes in Inland Revenue Approved Mileage Rates.
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