This week I thought I would slip in a tax tip, about company cars. In the old days they were a great way of paying employees extra without them having to pay tax or national insurance. Then the revenue put a stop to all that by introducing special rules about taxing them as benefits in kind. It was usually still worth it for both company and employee. However, nowadays you need to be very careful. Tax rates have been linked to carbon dioxide emissions for some years now and the tax rates are rising year on year.
The result is that having a company car may not be as good as it used to be. I will come to that next week but in the meantime here’s a thought for those of you getting private fuel paid for (or whose spouse etc is). Get your accountant or company accountant to check the figures for you to make sure you are getting a good deal.
And don’t assume that if you are in a company scheme then the accountancy department will have done the sums already. There is a world of difference between number crunching and actually thinking about what those numbers actually mean to someone.
I had a request from an Audi A4 driver to look at his tax position. It turned out he was paying about £1,800 in tax to get private fuel worth £1,200. A loss of £600 per year. And that doesn’t account for the extra cost to the company in fuel and payments to HMRC. And he worked for a large company with a “proper” accountant. So be aware.