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Budget 2011: company car tax

  • 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
11 14 N/A 99-100 94-95
12 15 N/A 101-105 95-100
13 16 N/A 106-110 101-105
14 17 N/A 111-115 106-110
15 18 121-125 116-120 111-115
16 19 126-130 121-125 116-120
17 20 131-135 126-130 121-125
18 21 136-140 131-135 126-130
19 22 141-145 136-140 131-135
20 23 146-150 141-145 136-140
21 24 151-155 146-150 141-145
22 25 156-160 151-155 146-150
23 26 161-165 156-160 151-155
24 27 166-170 161-165 156-160
25 28 171-175 166-170 161-165
26 29 176-180 171-175 166-170
27 30 181-185 176-180 171-175
28 31 186-190 181-185 176-180
29 32 191-195 186-190 181-185
30 33 196-200 191-195 186-190
31 34 201-205 196-200 191-195
32 35 206-210 201-205 196-200
33 35 211-215 206-210 201-205
34 35 216-220 211-215 206-210
35 35 221-225+ 216-220+ 211-215+

So, with all that in mind, take an example:

Car details:

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.