Company Car Taxation
The CO2 emission scale charges which are used to calculate company car benefit charges have been increased for 2008/09. with the threshold for the minimum charge rate for calculating benefit-in-kind, on company cars, reduced from 140g per kilometre to 135g per kilometre. A new lower 10% band for company cars with CO2 of 120g per kilometre will also be introduced from the 1 April 2008.
|
|
Taxable % of list price |
|
Taxable % of list price |
|
Taxable % of list price |
g/km |
|
2006/07 to 2007/08 |
|
2008/09 |
|
2009/10 |
135 |
|
15* |
|
15* |
|
15* |
140 |
|
15* |
|
16* |
|
16* |
145 |
|
16* |
|
17* |
|
17* |
150 |
|
17* |
|
18* |
|
18* |
155 |
|
18* |
|
19* |
|
19* |
160 |
|
19* |
|
20* |
|
20* |
165 |
|
20* |
|
21* |
|
21* |
170 |
|
21* |
|
22* |
|
22* |
175 |
|
22* |
|
23* |
|
23* |
180 |
|
23* |
|
24* |
|
24* |
185 |
|
24* |
|
25* |
|
25* |
190 |
|
25* |
|
26* |
|
26* |
195 |
|
26* |
|
27* |
|
27* |
200 |
|
27* |
|
28* |
|
28* |
205 |
|
28* |
|
29* |
|
29* |
210 |
|
29* |
|
30* |
|
30* |
215 |
|
30* |
|
31* |
|
31* |
220 |
|
31* |
|
32* |
|
32* |
225 |
|
32* |
|
33** |
|
33** |
230 |
|
33** |
|
34*** |
|
34*** |
235 |
|
34*** |
|
35 |
|
35 |
240 |
|
35 |
|
35 |
|
35 |
Emissions figures for vehicles are rounded down to the nearest 5g/km.
Diesel supplements: * add 3% ** add 2% *** add 1%
Diesel supplement waived if Euro IV emission standard met and the vehicle is registered before 1 January 2006.
Company Car Private Fuel
The scale charge figure for private fuel provided for company cars remains at £14,400 for 2007/08. The benefit in kind charge is calculated by applying the percentage determined by the CO2 emission table opposite to £14,400.
Company Van Taxation
Benefit in kind charges where a van is used for private use (other than home to work travel).
| Tax Year | Scale Charge £ |
2007/08 |
£3,000# |
# Further £500 charge if private fuel also provided.
VAT Fuel Scale Charge
Where employers provide free private fuel for an employee’s company car, the employer is required to pay output VAT using the scale charges as set out below.
Rates applicable from 1 May 2007:
| CO2 Band | VAT on 12 month charge, £ |
140 or below |
108.72 |
145 |
116.17 |
150 |
123.62 |
155 |
131.06 |
160 |
137.77 |
165 |
145.21 |
170 |
152.66 |
175 |
160.11 |
180 |
166.81 |
185 |
174.26 |
190 |
181.70 |
195 |
189.15 |
200 |
195.85 |
205 |
203.30 |
210 |
210.74 |
215 |
218.19 |
220 |
224.89 |
225 |
232.34 |
230 |
239.79 |
235 |
247.23 |
240 or above |
253.94 |
Mileage Rates
An announcement was made stating that the Government will consider the case for changing the structure of AMAPs to align the tax/NICs treatment and to ensure that rates and thresholds are set at an appropriate level to promote environmentally friendly business travel.
Approved mileage rates for private cars (pence per mile)
| Engine Size |
|
Up to 10,000 miles |
|
Excess over 10,000 miles |
|
All cars |
|
40p |
|
25p |
|
Company car fuel advisory rates (pence per mile)
| Engine Size |
|
Petrol |
|
Diesel |
|
LPG |
1,400cc or less |
|
9p |
|
9p |
|
6p |
1,401cc to 2,000cc |
|
11p |
|
9p |
|
7p |
Over 2,000cc |
|
16p |
|
12p |
|
10p |
Main Tax Rates and Allowances 2007/08
| Income Tax |
|
Savings income - Dividends |
|
Savings income - Other |
|
Other income |
On first £2,230 |
|
10% |
|
10% |
|
10% |
£2,231 to |
|
10% |
|
20% |
|
22% |
Over £34,600 |
|
32.5% |
|
40% |
|
40% |
From 6 April 2008, the basic rate of income tax will be reduced from 22% to 20% and the 10% starting rate will be removed for earned income but will continue to be available for savings income and capital gains
| Main Personal Allowances |
|
2007/08 £ |
Aged under 65 |
|
5,225 |
Aged 65 to 74 |
|
7,550 |
Aged 75 or over |
|
7,690 |
Income limit for aged related allowances |
|
20,900 |
National Insurance |
|
2007/08 |
Class 1 (employment) earnings threshold |
|
£100 p/w |
Employee's rate - |
|
|
£100.01-£670 per week |
|
11% |
excess over £670 per week |
|
1% |
Employer's rate - |
|
|
excess over £100 per week |
|
12.8% |
Corporate Tax |
|
2007/08 % |
|
2008/09 % |
|
2009/10 % |
Profits between £0 and £300,000 |
|
20% |
|
21% |
|
22% |
Profits over £1,500,000 |
|
30% |
|
28% |
|
28% |
A marginal relief fraction of 11/400 applies to taxable profits between £300,001 and £1,500,000.
The main rate of corporation tax will be set at 28 per cent for the financial year 2008-09. The small companies’ rate will be set at 20 per cent for the financial year 2007-08; 21 percent in 2008-09; and 22 per cent in 2009-10.
For Further information on taxation and the effect on employers and employee’s please contact us on 020 8995 5935.