vw company car tax[1]

7/31/2019 Vw Company Car Tax[1]

1/16


2/16

Budget 2012 headlines

The Coalition Governments third Budget statement contained a number of

announcements impacting on the UK company car and van market. These are:

Company car tax rates for ve years

to / published

Five year benet-in-kind tax

exemption for zero carbon and ultra

low carbon emission vehicles to end

from April 2015

Removal of the 3% diesel supplement

from April 2016

Car fuel benet charge to rise from

18,800 to 20,200 in 2012/13 and

by 2% above the rate of ination in

2013/14

Van benet charge frozen at 3,000

in 2012/13

The ve year exemption for zero

carbon vans from the van benet-in-

kind charge will expire from April 2015

Van fuel benet charge frozen for

2012/13 but to rise by the rate of

ination in 2013/14

The 100% rst year capital

allowance for businesses purchasing

low emissions cars extended to

31 March, 2015

The CO2 emissions threshold below

which cars are eligible for rst year

capital allowance cut from 110g/km to

95g/km from April 2013

Leased business cars no longer

eligible for the rst year capital

allowance from April 2013

The CO2 emissions threshold for

the main rate of capital allowances

for business cars reduced from

160g/km to 130g/km from April 2013.

The threshold above which the lease

rental restriction applies also reduced

from 160g/km to 130g/km

Ination-linked increase to car and

van Vehicle Excise Duty rates from

1 April, 2012

The previously announced 3.02p

per litre fuel duty increase due on

1 August, 2012 will go ahead

No change in Class 1A National

Insurance rates

No change in tax-free Authorised

Mileage Allowance Payment rates.

2 Were with you all the way


3/16

Vehicle Excise Duty (VED)

3Were with you all the way

On 1 April, 2012, VED - most standard

rates and rst year rates - increased in

line with the rate of ination.

However, standard VED rates for cars

with up to 120g/km CO2 were frozen.

Additionally, rst year rates for cars

emitting up to 130g/km remain at 0.

Elsewhere, across the 13-band system,

there were increases in standard and

rst year rates ranging from 5 for

most categories to 30 in the rst year

rate for vehicles emitting more than

255g/km.

Polo: urban 35.3/8.0 67.3/4.2; extra urban (55.4/5.1) 91.1/3.1; combined 47.9/5.9 80.7/3.5.

CO2 91 139 ( ) Automatic gures


4/16


5/16

5

Company car tax 2012/13 to 2016/17

Were with you all the way

The start of the 2012/13 tax year heralds the introduction of a radical shake

up in company car benet-in-kind tax with the abolition of the of the so called

QUALEC (Qualifying Low Emission Car) category.

However, as a result of eet industry requests to enable vehicle choice list

planning as a consequence of extended replacement cycles, the Government has

given advanced notice of tax levels for the nancial years up to and including

2016/17 (see table page 6-7).

Additionally, in the Budget, as well as conrming already announced tax

levels for 2012/13 and 2013/14 the Government revealed a number of othersignicant changes for 2014/15, 2015/16 and 2016/17. They are:

A further tightening of company

car tax thresholds by one percentage

point for cars emitting more than

75g/km of CO2, to a maximum of

35% in 2014/15, and by two

percentage points, to a maximum of

37% in both 2015/16 and 2016/17.

From April 2015, the current ve

year exemption for zero carbon and

ultra low carbon emission vehicles

will end. The appropriate percentage

for zero emission electric cars and

low carbon vehicles will be 13% from

April 2015 and will increase by two

percentage points to 15% in 2016/17.

From April 2016, the Government

will remove the 3% diesel supplement

dierential so that diesel cars will be

subject to the same level of tax as

other cars.

HM Revenue & Customs has calculated that the increase in newly announced

company car tax rates will on average result in an employee driving a petrol-

engined car paying an additional 70 in 2014/15, 165 in 2015/16 and

165 in 2016/17.

Meanwhile, an employee driving a diesel company car will see average

increases of 85 in 2014/15 and 190 in 2015/16, followed by a reduction

of 85 in 2016/17 when the 3% diesel supplement is removed.


6/16


0 0 0 0 N/A N/A

5 1-75 1-75 1-75 N/A N/A

10 76-99 76-94 N/A N/A N/A

11 100-104 95-99 76-94 N/A N/A

12 105-109 100-104 95-99 N/A N/A

13 110-114 105-109 100-104 0-94 N/A

14 115-119 110-114 105-109 95-99 N/A

15 120-124 115-119 110-114 100-104 0-94

16 125-129 120-124 115-119 105-109 95-99

17 130-134 125-129 120-124 110-114 100-104

18 135-139 130-134 125-129 115-119 105-109

19 140-144 135-139 130-134 120-124 110-114

20 145-149 140-144 135-139 125-129 115-119

21 150-154 145-149 140-144 130-134 120-124

22 155-159 150-154 145-149 135-139 125-129

%of

P1

1D

Price

20

12/13

CO

2(g/km)

20

13/14

CO

2(g/km)

20

14/15

CO

2(g/km)

20

15/16

CO

2(g/km)

20

16/17

CO

2(g/km)

Up to the end of tax year 2014/15 add 3% for diesel cars up to a maximum of 35%

For tax year 2015/16 add 3% for diesel cars up to a maximum of 37%

Company car tax 2012/13 to 2016/17


7/16


23 160-164 155-159 150-154 140-144 130-134

24 165-169 160-164 155-159 145-149 135-139

25 170-174 165-169 160-164 150-154 140-144

26 175-179 170-174 165-169 155-159 145-149

27 180-184 175-179 170-174 160-164 150-154

28 185-189 180-184 175-179 165-169 155-159

29 190-194 185-189 180-184 170-174 160-164

30 195-199 190-194 185-189 175-179 165-169

31 200-204 195-199 190-194 180-184 170-174

32 205-209 200-204 195-199 185-189 175-179

33 210-214 205-209 200-204 190-194 180-184

34 215-219 210-214 205-209 195-199 185-189

35 220+ 215+ 210+ 200-204 190-194

36 N/A N/A N/A 205-209 195-199

37 N/A N/A N/A 210+ 200+

%of

P1

1D

Price

20

12/13

CO

2(g/km)

20

13/14

CO

2(g/km)

20

14/15

CO

2(g/km)

20

15/16

CO

2(g/km)

20

16/17

CO

2(g/km)

In 2016/17 petrol and diesel cars treated equally for company car tax purposes.


8/16

HM Treasurys previously announced reduction in the main rate of capital

allowances on plant and machinery, which includes vans and cars, came into

eect from 1 April, 2012.

Capital allowance denotes the rate at which companies can write down the cost

of buying the vehicle against their taxable prots. Vehicles are separated into

three pools.

Vehicles up to 110g/km: companies can write down the full cost against their

taxable prots in the rst year of ownership.

Vehicles emitting 111-160g/km: companies can write down 18% of the cost of

the vehicle against their taxable prots each year, on a reducing balance basis(previously 20%).

Vehicles above 160g/km: companies can write down 8% of the cost against

their taxable prots each year, on a reducing balance basis (previously 10%).

8

Capital allowances and lease rental restriction


Cars already on eet prior to the

April 2009 change to an emissions

based structure will continue to be

administered under the previous price

based system until disposal under

transition period rules.

However, the Chancellor has also

announced further changes in capitalallowances business car rules, which

will become eective in 12 months

time (2013/14).

From April 2013, the Government

will extend the 100% rst year

allowance for businesses purchasing

low emissions cars for a further two

years to 31 March, 2015.

Simultaneously the CO2 emissions

threshold below which cars are

eligible for the rst year allowance

is reduced from 110g/km to

95g/km, and leased business cars

will no longer be eligible for the rstyear allowance.

Additionally, the CO2 emissions

threshold for the main rate of capital

allowances for business cars will

reduce from 160g/km to 130g/km.


9/16

9

Lease rental restriction

The rules aecting lease rental restriction - the amount of the lease rental

payments claimable against corporation tax - were reformed in line with the new

emissions-based capital allowance legislation.

In 2012/13 cars leased after 1 April, 2009, are treated in one of two ways:

Cars with emissions of 160g/km or less face no lease rental restriction, meaning

that the cost of the lease is fully deductible against taxable corporate prots.

Cars with emissions of 161g/km or more face a 15% lease rental restriction,

meaning companies can only deduct 85% of any rental payments against theirtaxable prots.

However, the threshold above which the lease rental restriction applies will

reduce from 160g/km to 130g/km from April 2013 in line with the threshold for

the main rate of capital allowances for business cars.

In relation to leases that started before 1 April, 2009, all lease rental payments

for cars costing more than 12,000 are subject to the old rules until termination

of the lease.


Passat: urban (26.2/10.8) 54.3/5.2; extra urban (47.9/5.9) 78.5/3.6: combined (36.7/7.7)

68.9/4.1. CO2 109 (180) ( ) Automatic gures


10/16

Volkswagens engineers are constantly

working to produce cars that oer

great performance with better fuel

economy and fewer harmful emissions.

Our BlueMotion and BlueMotion

Technology models are the most

ecient and economical within the

range.

Cars which wear the BlueMotion badge

(available in Polo, Golf, Passat andPassat Estate ranges) oer customers

the highest level of economy and

exemplary environmental credentials.

Those models feature the full

complement of Volkswagens innovative

range of energy-saving technologies,

from automatic start-stop to low

rolling resistance tyres, which work in

synergy with advanced common rail

diesel engines and gearboxes to cut

fuel consumption and reduce harmful

emissions. Other fuel-saving features

include improved aerodynamics and

battery regeneration. The combination

of these features helps to reduce the

day-to-day costs of running a eet, as

well as its environmental impact.

The breadth of BlueMotion Technology

modications varies from model

range to model range. But whatever

company car youre looking for, theres

sure to be one with a BlueMotion

Technology variant as the line-up now

includes Golf, Golf Plus, Golf Estate,

Golf Cabriolet, Scirocco, Jetta, Passat,

Passat Estate, Volkswagen CC, Eos,

Tiguan, Touran, Sharan and Touareg,

as well as the most recent addition to

the range, the up!

Featuring a Stop/Start function, battery

regeneration and a multifunction

computer which displays visual gear

change recommendations for optimum

fuel consumption, cars which display a

unique BlueMotion Technologies badge

strike a balance between reducing

eet costs and maintaining the drivers

safety and comfort.

Efciency and economy with BlueMotion


Passat Estate: urban (25.9/10.9) 54.3/5.2; extra urban (46.3/6.1) 74.3/3.8; combined

(35.8/7.9) 65.7/4.3. CO2 113 (183) ( ) Automatic gures


11/16


Example 1

Vehicle: Volkswagen Golf

BlueMotion TDI 5dr 1.6 105PS

P11D price: 19,390

CO2 emissions: 99g/km

2012/13 (13% BIK rate)

Cash value (P11D x BIK):

19,390 x 13% = 2,521

Employers Class 1A NIC:

2,521 x 13.8% = 348

2013/14 (14% BIK rate)


19,390 x 14% = 2,715


2,715 x 13.8% = 375

2016/17 (16% BIK rate)


19,390 x 16% =3,102


3,102 x 13.8% = 428

Class 1A National Insurance Contributions

Employers pay Class 1A National

Insurance Contributions (NIC) on

company cars and fuel at 13.8%.

As with company car tax, the NIC is

directly linked to the P11D value and

the CO2 emission gure of a vehicle.

As the company car tax table (page

6-7) highlights, emission thresholds

have tightened in 2012/13 and will

tighten further in future years.

The only way that employers can limit a

year-on-year increase in their NIC is to

ensure choice lists feature models with

the lowest possible emissions gure.

Sample calculations below highlight

the impact of the tax changes on NIC.

Example 2

Vehicle: Volkswagen Passat SE TDI

BlueMotion Technology 2.0 140PS

P11D price: 22,205


2012/13 (17% BIK rate)

Cash value (P11D x BIK):22,205 x 17% = 3,775


3,775 x 13.8% = 521

2013/14 (18% BIK rate)


22,205 x 18% = 3,997


3,997 x 13.8% = 552

2016/17 (20% BIK rate)


22,205 x 20% = 4,441


4,441 x 13.8% = 613


12/16


Mileage reimbursement rates

The HM Revenue and Customs

Authorised Mileage Allowance

Payments (AMAPs) set tax and

National Insurance exempted ratesclaimable for business mileage in a

private car.

For 2012/13 the rate of reclaim for

the rst 10,000 miles remains at 45p

per mile and 25p per mile thereafter.

In addition to claiming AMAP rates, anallowance for passengers (employees

and volunteers) at 5p per mile can also

be paid tax and National Insurance free.

If the AMAP rate paid to an employee

exceeds the approved amount for the

tax year, then:

For company directors or employees

earning 8,500 or more per year, the

excess amount should be reported

on form P11D as tax is due from

the employee

For employees earning less

than 8,500 there is no reporting

requirement

Regardless of an employeesearnings, the employer has no tax to

pay to HMRC

If the AMAP rate paid to an employee

is below the approved amount for the

tax year the employer has no reporting

requirements or tax to pay to HMRC.However, the employee will be able

to obtain tax relief (called Mileage

Allowance Relief) on the unused

balance of the approved amount.

All cars 45p 25p

Up to 10,000 miles Over 10,000 miles

AMAP rates

Golf: urban 23.9/11.8 60.1/4.7; extra urban (41.5/6.8) 83.1/3.4; combined 33.2/8.5

74.3/3.8. CO2 99 - 199 ( ) Automatic gures


13/16

Employer-provided fuel for private mileage

Employees pay benet-in-kind tax on fuel for private use paid for by their

employer, while the company must pay Class 1A NIC on the taxable scale charge.

The charge is linked to a set gure, known as the fuel benet charge multiplier.

In 2012/13 the gure is 20,200, up from 18,800. The charge will rise by 2%above ination in 2013/14. A separate gure applies for vans (see page 15).

2012/13: Calculating your free fuel liability

To calculate benet-in-kind liability on fuel for private use, you need to know:

The combined cycle fuel consumption of your company car

The CO2 emissions in g/km and the linked benet-in-kind tax percentage

The price of fuel used

The marginal tax rate of the driver (20% or 40%)

The Governments fuel benet charge multiplier (now 20,200)

Were with you all the way 13

Example 1 - the drivers view

Vehicle: Volkswagen Golf

BlueMotion TDI 5dr 1.6 105PS


Fuel economy: combined 74.3mpg

Benet-in-kind tax: 13% (2012/13)

Taxable value (fuel benet charge

multiplier x BIK):

20,200 x 13% = 2,626

Tax charge for a 20% taxpayer:

525 (worth 359 litres of diesel)

Breakeven is 5,883 private miles

Tax charge for a 40% taxpayer:

1,050 (worth 718 litres of diesel)

Breakeven is 11,766 private miles

Example 2 - the employers view

To calculate the cost of providing fuel

for private use employers must know:

Cost of fuel, VAT rate, VAT fuel scale

charge linked to CO2, Class 1A NIC

rate, Corporation Tax rate

Fuel cost (10,000 private miles at

1.46 pence per litre): 895.00

VAT recovery at 20%: (149.16)VAT fuel scale charge: 110.83

Class 1A NIC: 362.39

Total: 1,219.06

Corporation tax at 24%: (292.57)

Net cost to company of providing

free fuel: 926.49


14/16


Commercial vehicles 2012/13Company light commercial vehicles used privately incur benet-in-kind tax for

the driver, based on a taxable value of 3,000 in 2012/13. All electric vans are

exempt from benet-in-kind tax until the end of the 2014/15 nancial year.

If free fuel is also provided by the employer for private mileage an additional

van fuel benet charge applies. The charge for 2012/13 is 550 but will

increase by the RPI in 2013/14.

The annual tax payable for private use of a van in 2012/13 is:

For a 20% taxpayer: 3,000 x 20% = 600

For a 40% taxpayer: 3,000 x 40% = 1,200

If fuel for private use is provided then the tax charge for 2012/13 is:

For a 20% taxpayer: 550 x 20% = 110

For a 40% taxpayer: 550 x 40% = 220


15/16


Class 1A National Insurance - vans

Employer Class 1A National Insurance contributions for vans are calculated

on the same basis as benet-in-kind tax liabilities. The amounts payable are

calculated by multiplying the taxable values by 13.8%. The example (below)

shows the levels of contribution.

Class 1A National Insurance private use of a van (3,000 x 13.8%): 414

Class 1A National Insurance private use of fuel (550 x 13.8%): 76

Capital allowances - vans

A 100% rst year capital allowance applies on the purchase of electric vans.

Vehicle Excise Duty - vans registered on or after 1 March, 2001

Registered on/after 1 March, 2001 (not over 3,500kg revenue weight): 215

Euro 4 light goods vehicles registered between 1 March, 2003, and

31 December, 2006 (not over 3,500kg revenue weight): 135

Euro 5 light goods vehicles registered between 1 January, 2009, and

31 December, 2010 (not over 3,500kg revenue weight): 135

For more information on the Volkswagen Commercial Vehicle range visit

www.volkswagen-vans.co.uk/eet

The explanations and data set out in

this guide are for general informationonly, and though given in good faith,

are given without any warranty as to

their accuracy. Please refer to your

legal or tax adviser for individual

professional advice. All information

correct at date of publication,

April 2012.

Fuel consumption gures shown are

mpg/ltr per 100 km for the Urban,Extra-urban and Combined fuel cycles

in accordance with EU Directive 99/94.

For more information on the

Volkswagen model range or to request

a test drive, call the Fleet Business

Centre on 0800 38 989 38 or visit

www.volkswagen.co.uk/eet


16/16

vw company car tax[1]

Documents