- BIK tax threshold to start at up to 100g/km
- Graduated increases to 120g/km
- 35 per cent bracket reduces to 220g/km
Company car tax bands will tighten over the next few years and will be graduated between 100g/km and 120g/km from 2012.
It means any driver choosing a company car with emissions between 120g/km and 225g/km next year, will see an increase in their annual BIK charge during their term with their vehicle.
At present, petrol cars with CO2 emissions up to 120g/km are taxed at 10 per cent of their P11D value, while diesel cars with similarly low levels of emissions face a charge at 13 per cent.
While these bands remain the same for the next two years, from April 2012 cars with CO2 emissions up to 100g/km will be taxed at 10 per cent, rising to 11 per cent for cars from 100-104g/km and in one per cent increments for every 5g/km up to 225g/km and 35 per cent.
However, other tax bands undergo progressivly lower CO2 thresholds each year. For example a car with emissions of 145g/km currently in the 17 per cent tax bracket, would become an 18 per cent car from April 2010, 19 per cent from April 2011 and 20 per cent in April 2012.
The new levels, confirmed in the Pre-Budget Report, also stated that there would be 5g/km reductions in thresholds after 2012, although there was no word on the future of the three per cent diesel supplement.
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