The Government increased the tax charged on vehicles with higher CO2 emissions. From April 2002 vehicles that produce more gases are taxed at a higher rate than those that are more environmentally friendly.
The Budget 2006 announced that the threshold for the minimum percentage charge rate for calculating Company Car Tax is frozen at 140g/km for 2006/7 and 2007/8. In 2008/9, the lower threshold reduces to 135g/km for qualifying cars. Additionally, from 2008/9 a new percentage rate of 10% for company cars with CO2 emissions of 120g/km or less is introduced, further incentivising the uptake of ?cleaner? cars with low emissions of CO2.
Click here for chart to show taxable percentages of P11D price applicable for 2006/7 and beyond.
Q: Who has to pay?
A: Anyone driving a company provided vehicle outside work will have to pay vehicle benefit in kind tax. (BIK)
Q: Should I choose a car with a low list price?
A: The CO2 emissions decide the rate of tax - but you will still be taxed on the list price (PIID). Buying a cheaper car should achieve a lower tax bill.
Q: What about high mileage - I need my car for work?
A: There is no longer any recognition for 'essential' users, with reductions in tax bills, however there are no penalites for essential mileage users. The percentages apply whether you travel 1 mile or 30,000 miles per annum.
Q: Where do I find the CO2 emission figure for my vehicle?
A: Most manufacturers supply CO2 emission information on brochures and price lists. The CO2 emission value is included on all V5 documents issued with new cars. You can also obtain the information from the following:
* The Vehicle Certification Agency in Bristol
*
www.vcacarfueldata.org.uk
*
www.smmt.co.uk
Q: Who can benefit under the new scheme?
A: Generally speaking, car users who are willing to look for a car with a low CO2 emission figure and list price will benefit under the current system.
AND FINALLY...
CO2 EFFICIENT VEHICLES WILL ALSO BENEFIT FROM LOWER VEHICLE EXCISE DUTY (ROAD FUND LICENCE) RATES.