Chris Thorpe looks at the taxation of company vehicles.
When an employer’s car is available for an employee’s personal use, there is an income tax charge on the employee – but that charge depends on what the vehicle is.
Class 1A National Insurance contributions (NICs) are payable by the employer on the value of the benefit on these vehicles.
1. Cars
Employers cannot claim annual investment allowance (AIA) on cars, but writing down allowances are available depending on the CO2 emissions – cars below 50g/km qualify for the main pool rate of 18%.
For the employee, the income tax charge depends on the car’s list price (not the actual purchase price) applied to a percentage (which increases with the car’s emissions – and increases each year); purely electric cars and hybrids capable of 130+miles
