How tax-efficient is your company car?

The company car has continued to be an important part of the remuneration package for many employees, despite increases in the taxable benefit rates over recent years.

However, did you know that tax and NIC costs mean that your company car may not be the most tax-efficient option for either the employer or the employee?

At one time company vans were an interesting option because the annual benefit-in-kind tax charge was a maximum of £200 (including fuel). However, with effect from 6 April 2007 this maximum has risen to £1,200 plus up to £200 for fuel!

You may find that you are better off paying employees for business mileage in their own vehicles, at the statutory mileage rates.

We can offer you advice on the costs involved, and make suggestions as to where you could make savings.

Year End Strategies 2007/08

Disclaimer:
This guide is prepared as a general guide only. No responsibility for loss occasioned to any person acting or refraining from action as a result of any material in this publication can be accepted by the author or publisher. Always seek professional advice before acting.