- Majority of cars see 1% rise in BIK taxation
- 5% taxation remains for ultra-low emission cars
- Diesel levy of 3% remains, £80,000 price cap abolished
The Budget announced this week outlined a number of changes to the current company car tax system.
But what exactly are the changes and what does it all mean for the Company Car Driver?
The Government announced in the budget that company car tax will increase by 1% for cars emitting between 95 and 219g/km CO2 on April 6, 2013.
Cars emitting between 75 and 95g/km CO2 will be eligible for 5% BIK taxation, while drivers of zero emission cars will still pay 0%.
The £80,000 price cap on company car list prices has also been abolished, meaning those with a company car worth more than the £80,000 limit will now have to pay company car tax the same as all other drivers.
The 3% surcharge for diesel cars remains in place, as illustrated in the table below.
|% of P11d price (petrol)||% of P11d price (diesel)||2011/2012 g/km||2012/2013 g/km||2013/2014 g/km|
|10||13||Up to 120||Up to 99||Up to 94|
So, with all that in mind, take an example:
VW Golf 1.6 TDi BlueMotion SE 5dr
CO2 Emissions: 107 g/km
Engine Size: 1598 cc
Fuel Type: Diesel
P11D Value: £19,155
Company car taxation for 2011/12
Car Benefit Percentage 13%
Cash Equivalent Value £2,490
Annual Tax at 20% £498
Monthly Tax at 20% £41.50
Company car taxation for 2012/13
Car Benefit Percentage 16%
Cash Equivalent Value £3,064.8
Annual Tax at 20% £612.96
Monthly Tax at 20% £51.08
Company car taxation for 2013/14
Car Benefit Percentage 17%
Cash Equivalent Value £3,256.35
Annual Tax at 20% £651.27
Monthly Tax at 20% £54.27
This means that in 2012/2013, compared to 2011/12, a company car driver will pay £9.58 more a month, or £114.96 extra a year. A smaller increase will occur between 2013/14 and 2012/13, with company car drivers paying an additional £38.31 a year based on the example above.
Compare 2013/14 to 2011/12 and a Company Car Driver will be paying an additional £153.27 a year.