Company cars are in the sights of the tax man, with a raft of tax increases arriving in April, focussed on larger, less fuel-efficient company vehicles.
Firms can claim capital allowances back on their company cars – a percentage of the total purchase price that can be written off against taxable income. For a long time the main rate was on cars with emissions of 160g/km or less, but from April this will drop to 130g/km. With this in mind, many MDs are expected to start hunting down cars in the new lower bracket.
There are other big changes too. At present there is 100% capital allowance for cars that emit under 110g/km, but this will drop to 95g/km in April.
Tax paid in Benefit in Kind (BIK) for employees is calculated using three criteria: the car’s price (including options but minus registration and road tax), its CO2 emissions and its fuel type.
Going – or continuing to be – green will still be rewarded, with zero emission cars like the Nissan Leaf and the soon-to-be-released Renault Zoe being free under BIK. Vauxhall’s Ampera, and similar ultra-low emission cars, will cost around £25 for the basic rate tax payer.
As zero and ultra-low emission cars gain in popularity, the taxman will be turning more of his attention to even the greenest cars. Indeed, in 2015 these low emission cars will be taxed at 13% for business use.
It looks like it will get trickier to keep automotive costs down for many firms – not withstanding getting breakdown cover quotes from startrescue.co.uk. Company car buyers will undoubtedly be seeking out lower emission cars if they want to save on their business costs.
Breakdown Cover from 
