Save £'s on your company car tax

itsfreetosmile

Do you drive a company car?

If yes, then you will be paying Benefit in Kind tax. (For those who don't know, the BIK tax you pay is calculated by multiplying the price of the car by the % of tax attributed to it)

At the moment if you drive a diesel Euro IV compliant car then you will be getting a 3% tax waiver benefit. From Jan 1 2006, this is being taken away.

This means that if you change your car in Dec 05 or before you could save £'s compared changing your car in Jan 06 or beyond. And the 3% waiver lasts as long as you keep the car!

The problem is that there's no benefit for your company (apart from being good to their employees!) So car manufacturers are going to try to pull forward sales by offering deals to cover early termination costs, incentives to change brands, change from petrol to diesel etc - Anything that doesn't cost your company, but saves you tax!

Company car drivers are difficult to market to, so unless you hassle your Fleet Manager or whoever looks after your company cars you might miss out if you are due to change your car.

Happy motoring!

BFG_2

Alternatively consider getting a 4x4 Twin cab pickup (eg Nissan Navarra, Mitsubishi L200) - the BIK on these is only £500 per annum (and no BIK on the petrol!!!)

BTW they are terrible to drive (compared to a decent car).

reddevilled

BFG wrote:

Alternatively consider getting a 4x4 Twin cab pickup (eg Nissan Navarra, Mitsubishi L200) - the BIK on these is only £500 per annum (and no BIK on the petrol!!!)

BTW they are terrible to drive (compared to a decent car).

Be aware that the company van rules (which commercial vehicles such as those mentioned above fall into the bracket of) are changing and it ceases to be quite as attractive in the coming years.

BFG_2

Yes

changes in 2007.

The BIK is then either zero or £3000 per annum (depending on if any private usage or not).

nemo183

If you run a small car, it's possible you may be better off running it under the Inland Revenues "Approved Mileage Rates Scheme"

http://www.theaa.com/allaboutcars/companycartax/ir_mileage_rates.jsp?page=home

Over recent years, this scheme has become less and less attractive, particularly for large cars.

However, if you run your own business, and run a small car, it still has some attractions. The main one of which is that although you are supposed to carefully record details of business mileage, in practice, the revenue are very unlikely to ask to see these figures if you claim for, say, under 15,000 miles per annum. I know many businesses that operate almost entirely by phone, or use the train for long distance appointments. Not that in anyway I'm suggesting anyone claim for business miles they haven't actually done...