ChatterBank1 min ago
Tax on vehicles
2 Answers
Can anyone explain to me in simple terms what effect having a company car has on one's tax code/individual tax circumstances?
Thanks.
Thanks.
Answers
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The gist is that you are assessed as having an additional income of the 'worth' of the car. It gets charged to you by reducing your persoanl allowances (which starts at �6030 this year) by this amount.
How HMRC does this is explained here - follow the links to different pages).
http://www.hmrc.gov.uk/cars/
However the main drivers of the cost to you are the new price of the car and the amount of CO2 it produces.
How HMRC does this is explained here - follow the links to different pages).
http://www.hmrc.gov.uk/cars/
However the main drivers of the cost to you are the new price of the car and the amount of CO2 it produces.
I agree with buildersmate. The HMRC site should help you work out the impact.
If you want a rough guide, the taxable benefit is typically �3000 to �4000 a year, so your tax code would be reduced by this amount. If pay tax at 20% the impact on your pay could be to reduce it by around �15 a week, but if you pay tax at 40% you'd pay twice as much. However the figures can vary for different cars so check out the HMRC site.
If you want a rough guide, the taxable benefit is typically �3000 to �4000 a year, so your tax code would be reduced by this amount. If pay tax at 20% the impact on your pay could be to reduce it by around �15 a week, but if you pay tax at 40% you'd pay twice as much. However the figures can vary for different cars so check out the HMRC site.
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