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Driving in your car?

Shared from Tax Insider: Driving in your car?
By Chris Thorpe, April 2022

Chris Thorpe looks at some company car changes since 2020, and their tax effect.   

One of the more common benefits-in-kind is the provision of a company car. An income tax and Class 1A National Insurance contributions (NICs) charge arises when the employer provides a car which is available to the employee for their private use. The actual use of the car is irrelevant if the car is at the employee’s disposal; this is enough to trigger the liability.  

The income tax and NICs rate is determined by the list price of the car (not the price paid) and applying that figure to a percentage based upon the CO2 emissions; the higher the emissions, the higher the percentage; clearly, the intention is to incentivise the use of cleaner cars and deter dirtier ones. Those percentages go up and up each year. 

Benefits-in-kind 

From 2020/21, the scale was based

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