Co Car Rules

Company Car Rules

In an attempt to reduce the pollution of the environment, the Government changed the way in which company cars are taxed, rewarding the smaller and less polluting vehicles whilst "hammering" the "beasts of the roads". It is therefore very important to understand the these rules before you replace your company car.

Until April 2002, if your business mileage is in excess of 18,000 miles a year you are given a very large discount. This is to benefit the true users of company cars and not those who have a car simply to go to and from work in. There is no such allowance in the new rules, and those most affected will be those who use their car as an office, and as such have fairly large cars.

The scheme works simple on the CO2 emissions of your car, and you pay the associated percentage (between 15% and 35%) on the list price of the car when new. This is the list price and not the price you paid for it, therefore any savings made by importing a car from Europe are not accounted for. The calculated amount is then put on your P11d form and your tax return and you pay tax at the appropriate rate.

The next question is how do I find out what the CO2 level is and what percentage is to be used? The easiest solution is to get a copy of What Car magazine and look under the new car section. For all new cars the section gives the CO2 and benefit in kind rate.

But it gets worse! All diesel cars have an additional 3% (up to a maximum of 35%) to pay on these figures because these pollute local air quality greater, even though they are better for global warming!

So who are the winners and losers? Without doubt the losers are those who have big cars and do excessive mileage, as they have lost their massive usage discount. The winners are those who have smaller cars, and who did not do much business mileage.

Examples	Price	Co2	%	Taxable
Peugeot 607 2.2HDi SE	23.520	178	24	5,645
Alfa Romeo 166 2.0TS	21,750	230	32	6,960
Vauxhall Signum 3.0 CDTi V6	26.215	200	29	7602
Audi A6 2.4 V6 SE	24,175	233	32	7,736
Volvo S80 2.9 SE	28,593	232	32	9,150
Lexus GS300 SE	31,770	281	35	9,849
Jaguar S-Type 3.0 V6 SE	32,270	259	35	11,295

Older Cars

Older cars will be taxed as follows:

Registered Pre 1998

These cars will be taxed on there engine size similar to the present system. Up to 1400cc at 15%, 1401cc to 2000cc at 22% and 2001cc plus at 32%.

Registered From 1 January 1998

These will be taxed on their CO2 emissions as with new cars. If no CO2 figures exist they will be taxed on their engine size. Up to 1400cc at 15%, 1401cc to 2000cc at 25% and 2001cc plus at 35%.

Feel free to discuss this matter more fully with us with your specific car details

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