NB - A loading of three percentage points is added to the Scale Charge for a diesel powered vehicle but capped at a maximum of 35 per cent. However, the three percentage points loading does not apply if a diesel engine car is Euro IV compliant i.e. it meets Euro IV exhaust emission criteria and was first registered prior to 1st January 2006.

This means that the minimum tax level for a diesel registered from January 1, 2006 is 18 per cent, although the maximum will remain at 35 per cent. Exact emissions are rounded down to the nearest 5g/km e.g. 199g/km will be rounded down to 195.

Vans

Vans have a fixed rate of BIK of £3000 per year and zero if you can prove the vehicle is used SOLEY for business use.

To qualify as a van the vehicle must have a 1 metric tonne payload

The company car tax thresholds will tighten further with effect from 6th April 2011 by 5g per kilometre in addition to the 5g change announced last year, which takes effect from 6th April 2010.

The following abbreviated table demonstrates the progressive narrowing of the 15 per cent band which serves to increase the taxation charge for the bands which follow.

The net effect is to increase the company car benefit in kind tax year by year on all vehicles except those emitting 120g CO2 per kilometre or less.

* +3% for diesel cars

From 2012/13 the scales will be reviewed, while retaining the incentive to purchase the lowest emitting vehicles. The company car tax bands will be extended so that they increase by 1 per cent with every 5g CO2 per kilometre increase in emissions, in a linear manner from the 10 per cent starting point.

Specific rates and thresholds will be announced in future budgets

Other detail changes from 6th April 2011 include:

• Drivers of Euro IV diesel cars registered before the 1st January 2006 are currently taxed at the same percentage rate as drivers of cars fitted with a petrol engine. The taxation of these cars will be subject to the 3 per cent uplift for diesel cars from this date
• Discounts for alternative fuelled cars (e.g. LPG) will be abolished as will those for hybrids emitting 121g CO2 per kilometre or more
• The current £80,000 cap on vehicle P11d value will be removed, increasing the tax paid on the small number of company vehicles above this level
• Electric cars will continue to be subject to the 9 per cent band
• Consideration will be given to abolishing the diesel supplement in company car tax for diesel cars which comply with the future Euro VI emission and air quality standards in advance of their planned introduction in 2014.

COMPANY CAR FUEL SCALE CHARGES 2008/9

In his April 2002 Budget, the Chancellor of the Exchequer announced a new basis – effective April 2003 - for taxing the benefit of free fuel provided for private motoring in a company car. The new charge is, like the new company car benefit charge, linked to the car’s CO2 emissions, rewarding cleaner, more fuel efficient cars with a lower tax charge.

To arrive at the new fuel scale charge, the Inland Revenue applies the same percentage figure used to calculate your company car benefit charge. The percentage figure is multiplied by a set figure, which until April 2008 remains unchanged at £14,400. For the tax year 2007/8 this has increased to £16,900.

Should a driver take free private fuel?
To calculate the private mileage cut off point below, at which it is not worth receiving free private mileage fuel from an employer, apply the following test:

Breakeven private mileage =

These AFRs represent average fuel costs and employers can choose to set rates which better reflect their particular circumstances.

HM Revenue and Customs will accept drivers paying the cost of fuel back at less than the guideline rates if they can show it covered the full cost of the fuel provided.

These rates will continue to apply until further notice. Following a number of changes announced recently, the rates will now be reviewed in the event of a variation in fuel prices of greater than 5 per cent from the prices used at that time.

For more details visit  http://www.hmrc.gov.uk/cars/fuel_company_cars.htm

Allowances for OPT OUT drivers

You may use your own vehicle for use on business trips. the employer can pay a tax free reimbursement for this on a per mile basis - current rates are as follows:

These rates – otherwise known as approved mileage allowance payments or AMAPS - apply to the reimbursement of fuel costs for business mileage in private, i.e. driver owned vehicles.