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Company Car Tax

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Tommyp100 Posts: 2 Newbie

4 July 2011 at 11:25AM in Cutting tax

(Hopefully posting in the right place...)

In the 2010/2011 tax year I earned enough that I should have paid company car tax at higher rate but though salary sacrifice (Pension and Additional Regular Pension Contributions or 'ARC') I reduced my gross pay to below £37400 so only paid basic rate for my company car.

Now with a small increase from my employer and the decrease in the boundary between basic / higher I now earn just more than £35k after salary sacrifice and so I believe I will now have to pay tax at 40% on the car from April 2011.

If this is correct my employers small salary increase will result in me actually being worse off! (Salary increased by £515, company car tax bill increased by c£900)

I'm looking at options to reverse this situation. Presume the easiest way is to increase my ARC to take me back below the higher rate start point.

Anyone can any other ideas?

Thanks :cool:

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Company Car Tax

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