Tax
The choice your drivers make today could decide what they drive for the next three years. Legislative, company car tax and environmental issues pose new questions that need answers even before they consult your company car shortlist
Tax Liability On A Company Car
A company car is viewed by the Inland Revenue as a Benefit In Kind, which means that drivers have to pay tax on it. Exactly how much tax should be paid is determined by the price of the vehicle (or P11D value), which includes the cost of optional extras but excludes Vehicle Excise Duty (the cost of the tax disc) and the statutory £38 Government first registration charge.
The chart below shows the Government CO2 emission thresholds for the 2008/9 tax year and beyond.
Step 1: Check your vehicle's CO2 emissions against the chart to get the taxable percentage.
Step 2: Multiply the CO2 taxable percentage by the P11D price to provide the car's taxable value.
Step 3: Multiply the car's taxable value by your income tax rate – 22% for lower tax rate payers, and 40% for higher rate payers – to get the tax sum you need to pay. Tax liability on a company car
| Tax liability on a company car |
| % of P11D Price to be taxed | 17 | 19 | 21 | 23 | 25 | 27 | 29 | 31 | 33 | 35 | 35 |
| CO 2 (g/km) 2008/9 | 145 | 155 | 165 | 175 | 185 | 195 | 205 | 215 | 225 | 235 | 245 |
Figures correct November 2008
DIESEL: Non Euro IV cars between 15–32% add 3% for Diesel, 33% add 2% for Diesel, 34% add 1% for Diesel, 35% maximum charge so no supplement.
Taking Cash Instead Of A Company Car
Your drivers may choose to opt out and finance their own car, or the employer may agree to offer a cash payment instead of a company car. But it's worth bearing in mind that by choosing to fund their own car, drivers take on the responsibility for maintenance and servicing, plus the cost of insurance up to full business use standards.
If any of your drivers choose to fund their own company car, there are a number of finance packages available. Land Rover Freedom offers a Personal Contract Purchase (PCP) scheme that lets you pay for your car through monthly payments. Contact your dealer to get a finance quote.
How Do Your Drivers Finally Choose?
Once your drivers have calculated the taxable value on their desired car and assessed the various funding options, they'll need to drive the car before making their final decision. Fleet Managers can arrange a demonstration vehicle for their drivers.
To arrange a demonstration vehicle, contact the Land Rover Business Centre or locate your nearest dealer.
