Company car tax question

[JumboBeef]

Hello.

I've never had a company car before but the chance has arisen to go for a position where a car is provided (Honda CRV).

Could anyone tell me what the tax implications are if I were to go for this position with the car? The basic pay is just under the 40% tax point, rising within a couple of years to over 40%.

Thanks.

[The Beaver King]

Honda CR-V 4x4 2.2 i-DTEC S-T 5dr

Target Price: £23,880

Price: £25,705

	2012/2013	2013/2014
Percentage charge	23%	24%
Benefit in kind	£5,867	£6,122
Tax payable at 20%	£1,224	£1,224
Tax payable at 40%	£2,347	£2,449

• Calculations based on taxable value of £25,510 and CO2 emissions of 149g/km

HTH

[TwigtheWonderkid]

Honda are about to launch a 1.6 low co2 model (98g has been touted about), which will make the tax liability a lot lower. No idea of list price yet but if we guss at £22K, that gives an annual tax bill of £1232 at 40% or £616 at 20%

[JumboBeef]

Right, thanks.

So worst case I would pay £2449 p/a? About £200 per month extra tax.

(I assume the fact it has a fuel card doesn't change anything).

PS: it will be the most (or at least one of the most) powerful models as speed is important so no low CO2 models if it is at the expense of speed.

Edited by JumboBeef on Monday 17th June 15:00

[The Beaver King]

JumboBeef said:

Right, thanks.

So worst case I would pay £2449 p/a? About £200 per month extra tax.

(I assume the fact it has a fuel card doesn't change anything).

PS: it will be the most (or at least one of the most) powerful models as speed is important so no low CO2 models if it is at the expense of speed.

Edited by JumboBeef on Monday 17th June 15:00

When I checked the tax calculator for the CR-V, I just picked the most expensive model. So the above table is worst case.

It depends on the type of fuel card you have. I have a fuel card that all my diesel is paid on, but I declare my personal mileage at the end of each moth and this is subtracted from my monthly earnings. A fuel card of this type will not affect the tax paid.

If you have a fuel card where you pay for no personal fuel or do not declare any business mileage, then you will be taxed on this; quite heavily. I've found a calculator for 'all inclusive' fuel below:

	2012/2013	2013/2014
Tax benefit	£2,110	£2,152
Marginal tax rate	40%	40%
Tax payable via PAYE	£844	£860
Expected fuel consumption	40.0 mpg	40.0 mpg
Expected fuel cost per litre	134.61 p	134.61 p
Estimated annual private mileage	5,000	5,000
Value of free fuel	£764	£764
Breakeven private mileage	5,516 mi	5,626 mi
Net benefit loss benefit/loss (post tax)	£-79	£-95

So basically, if you are getting a private fuel card ensure you're doing over 5,000 miles a year, otherwise you'll be losing money via the extra tax. If you do approx 10,000 miles a year 'private' miles, you're quids in.

[JumboBeef]

Interesting stuff, thanks!

[TwigtheWonderkid]

TwigtheWonderkid said:

Honda are about to launch a 1.6 low co2 model (98g has been touted about), which will make the tax liability a lot lower. No idea of list price yet but if we guss at £22K, that gives an annual tax bill of £1232 at 40% or £616 at 20%

Ignore above. Actually it's the new Civic that's sub 100g co2, the new CR-V will be sub 120.