For the year 6 April 2007 to 5 April 2008 the amount of income tax you will pay on a company car depends on a number of factors.

 

 

All car manufacturers provide CO2 emission figures for the cars they manufacture. The tax % of the car is calculated on the basis of these emissions - the higher the emissions, the higher the tax %. See below.

 

2007/08 Company Car Tax guide

 

Private Fuel

If your employer provides you with fuel for your private mileage there will also be a fuel benefit in kind. This is calculated by multiplying the same tax % used in the car benefit calculation against a set figure for the year. For 2007/08 the figure is £14,400.

 

Company Vans

From 6 April 2007 the taxable benefit for the unrestricted use of company vans will be £3,000 (with no reduction for older vans) plus a further £500 of taxable benefit if fuel is provided by the employer for private travel.

 

The maximum tax payable on the use of a company van will therefore increase from April 2007 to £770 p.a. for a basic rate taxpayer and £1,400 p.a. for a higher rate taxpayer.

 

Van drivers can avoid a benefit charge if they agree not to use the van for personal journeys. Driving to and from work is acceptable so long as there is a reasonable amount of business use.

 

The amount of all the benefits is reduced if you do not have the vehicle for the whole tax year or if you pay something for using it privately.

 

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