GET YOUR QUOTE NOW
CALL THE TEAM NOW
Accountants247
  • Home
  • Our Services
    • Accounts
    • Tax Returns
    • VAT Returns
    • Bookkeeping
    • Payroll
    • Financial Director Service
    • Pensions
    • CIS Returns
    • Financial Planning
  • Get a Quote
  • The Blog
  • Contact Us
Accountants247
  • Home
  • Our Services
    • Accounts
    • Tax Returns
    • VAT Returns
    • Bookkeeping
    • Payroll
    • Financial Director Service
    • Pensions
    • CIS Returns
    • Financial Planning
  • Get a Quote
  • The Blog
  • Contact Us
GET YOUR QUOTE NOW
CALL THE TEAM NOW
Accountants247

Knowing the tax impact of using a company car

Do you know your company car tax benefit in kind?

James Drinkwater by James Drinkwater
in Tax
Reading Time: 3 mins read

Do you know the tax implications of a company car? We can explain the impact of a company car on your benefits in kind (BIK) and company taxable costs. #tax #accounting #companycar #benefitsinkind

Having the use of a company car is a great perk. But are you aware of the tax impact of a company car and how having this vehicle may affect your company benefits?

Two of the key tax considerations related to company cars are the benefits in kind (BIK) tax charges incurred by the driver, and the tax deductions which benefit the company. At present, it’s also worth understanding the benefits of running an electric or low-emission vehicle.

Understanding the BIK charges on your company car

The BIK amount you’re taxed on as the driver of a company car is calculated as a percentage of the list price of the vehicle when new. The list price includes delivery charges, optional extras and VAT but not the registration fee or the first year’s vehicle excise duty.

Because it’s based on the original ‘list price when new’ value, any discounts are ignored, and even for used cars, the original value is retained.

The percentage applied depends on CO2 emissions, and for hybrid vehicles the on-electric range, as you can see in the table below:

Screenshot 2023-07-18 at 3.57.51 PM

It’s worth noting that:

  • Diesel vehicles registered before January 2021 that aren’t RDE2-compliant attract a 4% surcharge on their published BIK rate, up to a maximum total of 37%
  • Where fuel is provided by the company for private mileage, the same percentage is applied to a value of £27,800.

Claiming company benefits against the cost of a company car

Although the driver is taxed on the perk of driving a company car, the company can benefit by claiming deductions for the costs involved in running this vehicle.

All expenses in connection with the operation and maintenance of the car are deductible as trading expenses, including things such as insurance, fuel and maintenance. Capital allowances are also available in respect of the purchase price of the vehicle.

Depending on the vehicle, the capital allowances available are:

  • 100% First Year Allowance – this is only for new zero-emission cars.
  • 18% annual allowance on written-down value – this is for second-hand electric vehicles and all vehicles with emissions between 1 and 50 g/km
  • 6% annual allowance on written-down value for all other new and used vehicles.

Talk to us about the tax implications of company cars

If you’re thinking about investing in a company car, it’s worth considering that there are tax advantages for both the company and the driver in selecting an all-electric vehicle. There are also advantages, to a lesser extent, in opting for a low-emission vehicle.

We can calculate the likely personal BIK tax charge on any vehicle you’re considering buying through your business, as well as advising on the tax and other implications for the company.

Talk to us before purchasing a company car for personal use. The tax charges can be higher than you may expect, so it’s worth considering the BIK impact before you buy.

Get in touch for a chat about your company car plans.

Source: Do-you-know-your-company-car-tax-benefit-in-kind
Tags: accountantsfrodshambenefitinkindcompanycartaxwarringtonaccountant
Previous Post

Take care of yourself, not just your business

Next Post

The value of a good UX: user experience

Next Post
The value of a good UX: user experience

The value of a good UX: user experience

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

About Accountants247

Accountants247

Accountancy made simple

Accountancy247 provide cost-effective, high value solutions to meet every clients needs regardless of the size of their business.

Facebook

Search

No Result
View All Result
LinkedIn Facebook Twitter
Accountants247

Hi, i'm James. If you have any questions please email me at sales@accountants247.co.uk

Articles

  • Accountant (11)
  • Business (82)
  • Businesses we help (3)
  • Capital Gains Tax (7)
  • Cashflow (19)
  • Childcare (3)
  • Company Car (2)
  • Corporation Tax (9)
  • Deadlines (7)
  • Dividends (3)
  • Exit Strategy (2)
  • Expenses (3)
  • Finance (11)
  • GDPR (2)
  • Grants (1)
  • IR35 (1)
  • Landlords (2)
  • Marketing (1)
  • National Insurance (1)
  • New Business (3)
  • News (12)
  • Pay (6)
  • PAYE (2)
  • Pensions (2)
  • Property (1)
  • Scams (1)
  • self-assessment (2)
  • Services (6)
  • Software (1)
  • Starting a business (4)
  • Sustainability (1)
  • Tax (44)
  • Testimonials (4)
  • Uncategorized (3)
  • VAT (1)

Contact Us

sales@accountants247.co.uk

0800 0519 446

Accountants247

Block5, Room 5172

The Heath Business and Technical Park

Runcorn

Cheshire

WA7 4QX

Company Registration Number 12983201

LINKS

  • Accountants247 Franchise

Accountants 247 © 2022.

We use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits. By clicking “Accept All”, you consent to the use of ALL the cookies. However, you may visit "Cookie Settings" to provide a controlled consent.
Cookie SettingsAccept All
Manage consent

Privacy Overview

Accountants247 Limited (Company Registration No. 12983201) and our registered office is 4 Whitworth Court, Runcorn, WA7 1WA. We are a Controller for the purposes of the General Data Protection Regulation (Regulation (EU) 2016/679). Our representati...
Necessary
Always Enabled
Necessary cookies are absolutely essential for the website to function properly. These cookies ensure basic functionalities and security features of the website, anonymously.
CookieDurationDescription
cookielawinfo-checkbox-analytics11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Analytics".
cookielawinfo-checkbox-functional11 monthsThe cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional".
cookielawinfo-checkbox-necessary11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookies is used to store the user consent for the cookies in the category "Necessary".
cookielawinfo-checkbox-others11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Other.
cookielawinfo-checkbox-performance11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Performance".
viewed_cookie_policy11 monthsThe cookie is set by the GDPR Cookie Consent plugin and is used to store whether or not user has consented to the use of cookies. It does not store any personal data.
Functional
Functional cookies help to perform certain functionalities like sharing the content of the website on social media platforms, collect feedbacks, and other third-party features.
Performance
Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.
Analytics
Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics the number of visitors, bounce rate, traffic source, etc.
Advertisement
Advertisement cookies are used to provide visitors with relevant ads and marketing campaigns. These cookies track visitors across websites and collect information to provide customized ads.
Others
Other uncategorized cookies are those that are being analyzed and have not been classified into a category as yet.
SAVE & ACCEPT
No Result
View All Result
  • Home
  • Our Services
    • Accounts
    • Tax Returns
    • VAT Returns
    • Bookkeeping
    • Payroll
    • Financial Director Service
    • Pensions
    • CIS Returns
    • Financial Planning
  • Get a Quote
  • The Blog
  • Contact Us

Accountants 247 © 2022.

  • ←
  • Message Us

    Leave a message and one of the team will get back to you shortly

  • WhatsApp
  • Facebook Messenger