Sarah Bradford looks at some changes to the company car tax rules taking effect from 6 April 2021.
Various changes to the company car tax rules came into effect from 6 April 2020, including a new way of measuring carbon dioxide (CO2) emissions and changes to the taxation of low emission cars. One year on, there are further tweaks affecting the 2021/22 tax year.
Recap: how company cars are taxed
A tax charge arises under the benefit-in-kind rules when an employee is provided with a company car which is available for his or her private use. The taxable value of the benefit (known as the ‘cash equivalent’ value) is a percentage (known as the ‘appropriate percentage’) of the list price of the car and any optional accessories, as reduced for any capital contributions (capped at £5,000).
