HMRC have published an updated ready reckoner which shows the appropriate percentage for calculating car benefit charge on company cars for tax years 2005–06 to 2016–17 say payroll experts Harris & Co accountants Northampton #accountantsnorthampton
Car benefit charge is calculated by applying the appropriate percentage to the list price of the car. The fuel type of the car and its CO2 emissions determine the appropriate percentage.
It is evident from the table that the cost of car benefit will keep rising for each tax year if the company car remains the same.
For example, the car benefit charge for a company car acquired in 2012–13 with an emission level of 120g/km was 15% of that car’s cost for that tax year. The benefit charge for the same car will increase to 17%, 19% and 21% of the car’s cost for tax years 2014–15, 2015–16 and 2016–17 respectively. Accordingly, it makes sense to consider switching to a newer company car at a similar price but with a lower emission level every couple of years to prevent the car benefit charge from escalating.
The ready reckoner is available from GOV.UK.