Does company car effect tax band?

Question

I am currently in the 22% income tax tax band but I am about to get a company car.
Could this change my tax band?

Answer 1

If the Car is provided as a 'perk' (because eg. you are a Manager) rather than as part of your Job (a 'needs' car eg. Travelling Sales or Field Service staff) then it is regarded as a 'Benefit in Kind' and various obscure rules are applied by Inland Revenue to decide 'How Much' it is worth.

Private use of a 'needs' car (for example, if you are allowed to use a Service Van at the weekends) is also regarded as a Benefit and a value is assigned.

The value is "added to your Income" = in practise, as soon as IR find out about it, they subtract the value from your Personal Allowance and issue you with a new Tax Code (which means you start paying Tax on more of your income).

NB> If you take a Car Allowance (instead of an actual car), the 'allowance' is simply paid as normal wages (and gets taxed as such) = so no adjustment to Personal Allowance and no new Tax Code.

Link below allows you to calculate the effect

Answer 2

depends on the benefit amount. if you were to complete a tax return then your gross salary will be added to the taxable benefits total and if this is alot then you could go into 40% tax depending on your current earnings at the moment.

if you know what car you are getting then contact a dealer for that type of car and ask for a list price and CO2 emissions value as these are used to work out car and fuel (if the company pay your petrol) benefit.

you can visit www.smmt.co.uk and go to the CO2 section under data services at the top. this will give you the % of the list price in-accordance with the vehicles CO2 value to give you the taxable benefit. For fuel benefit i think its the same % per the CO2 table of £15500 to give you the taxable amount.

if still unsure, im sure your companys accountant or payroll dept will be able to advise you. dont be afraid to ask them as not everyone is expected to know this information.

Answer 3

In thought the line tax is to advance our highway community, greater helpful our roads, fix them, gentle them particularly places and make stable the wear this is performed to indications, pillars etc....In prepare the government spends little or no on roads and wallet the money. seem on the Dartford tunnel and bridge. they have recovered the fee of making them repeatedly back, and have been meant to renounce the tolls while that passed off, quite of which they are elevating the toll fee back. this is purely money for previous rope.

Answer 4

yes but it depends on the value of the car

Answer 5

Nop, it didn't my dad's