Changes in Motor Vehicle Travel Costs

Company car tax rates

Changes in Motor Vehicle Travel Costs

HM Revenue & Customs now change, on a quarterly basis. The rates at which business mileage allowances may pay for cars provided by an employer. Where all fuel paid for by the directors/employees.  The rates design to reflect changes in petrol/diesel costs. In addition, the quarterly prices were unchanged from those accessible as of 1 December 2011. Which commenced on 1 June and 1 September 2011 (rates in brackets applied from 1 March 2011) and are set out below.  Click here to read more
Vehicle Engine Size                                                      Petrol                                                      Diesel
 
Up to 1400* cc                                                     15p   (before 14p)                              12p (before 13p)
 
1401* – 2000 cc                                                  18p   (before 16p)                              15p (before 13p)
 
Over 2000 cc                                                       26p   (before 23p)                              18p (before 16p)
 
*1600cc for diesel cars from 1 June 2011
 
The above rates may use to calculate the amount payable for all business journeys. Undertaken without incurring any tax liability on the individual employee. And, where all the employer’s gasoline purchases. Thus, the rates will use to define private gas costs. To reimburse the employer in such a way to prevent an auto fuel benefit tax.
 
Please notice that the updated prices are for corporate mileage of client vehicles only.  For non-company vehicles, there has been a change from 6 April 2011 in the 40p/25p rates to 45p/25p. That refers to the repayment of company miles incurred using a car of an employee’s own.
 
Whilst writing I would remind you of the importance of maintaining full. Accurate records of mileage undertaken (whether in company cars or employee-owned cars). Where business mileage reimburses using a rate per mile allowance. VAT input tax is recoverable (on the fair proportion of mileage allowances. Which relates to fuel in respect of which the petrol/diesel rates in the table above may use). Subject to a VAT invoice(s) held which must equal or exceed the value of the business mileage reimbursement. Thus, the date on the invoice(s) must correspond with the dates covered by any claim. It recommends that you tell your employees. That all mileage/fuel claims must support by VAT invoices.

VAT Fuel Scale Charge – CO2 Basis – Company Car Users
HM Revenue and Customs have changed, with effect from 1 May 2007. The fuel scale charge for calculating VAT due. Where fuel provides for private journeys in a company car from the engine size. Moreover, the fuel type system to a charge based on the CO2 rating of the vehicle. The new system, mirroring that used for direct taxation, now has 22 bands with 5g/km increments.
 
Apart from the change to a CO2 basis, the system operates in exactly the same way. That which applied before 1 May 2007.
 
The table to use for the new system has recently updated. For VAT periods commencing on or after 1 May 2011. Thus, a copy attaches for your information. Note that the current 20% VAT fraction of 1/6 applied to the annual, quarterly, or monthly scale charge. As appropriate to calculate the VAT due in respect of each company car provided. Where fuel is also provided for private journeys.

Van and Van Fuel Benefits
The taxable benefits arising in respect of vans increase for employees. Who uses a company van for private use from 6 April 2007. From the same date, a £500 (£550 pa from 6 April 2010) fuel benefit charge was also introduced. Where fuel provides for a company van and there is private use.   But, from 6 April 2006, the definition of private use has made much more generous.
 
The van benefit charges apply to anyone who has the use of a company van. Thus, deems to have private use (see below) of that van during the fiscal year. From 6 April 2007, there is a flat rate benefit charge on £3,000 per annum per van. Irrespective of the age of the van with reductions pro-rata. If the van is not provided for the whole tax year and on a and reasonable basis. If more than one employee entitles to use the van for private purposes. There is also the fuel benefit of £550 per annum if fuel provides for a van and there is private use.  The contractor would so have a Section 1a National Insurance obligation. With terms to any taxable income resulting.
 
The above but mitigate often by the more generous definition of private use now in force. The legislation states that where the van used for the purposes of business travel’. Then there may be no taxable benefit whatsoever.
 
Please note this more generous rule does not apply to cars where a tax charge arises. If the car is available for private us. Also does not apply to vans not provided for business purposes) providing there is no. Or only insignificant, private use. Commuting to and from work ignored for this test, as is another insignificant private use.

Insignificant private
The insignificant private use defines as the van used for a few days at most in the whole year. Price negligible (i.e. a short private trip to drop a quantity of garbage at the edge. A slight deviation to drop a child off at school), intermittent and irregular. A detour to call at the dentist on the way home and very much the exception to the normal pattern of use of the van.
 
Use that doesn’t qualify as trivial requires. When the person makes use of the car for a break. Private usage for a constant amount of time, to go shopping every week. Such as a fortnight, or use the car for social events outside of work.
 
This proposes, where necessary, for the avoidance of doubt and to endorse some claim. And there is no individual user and is taxable. That there is a provision in the employee’s employment contract. Which forbids the use of the van for private usage. Other than traveling to the office. Additionally, both workers will maintain a mileage log. To get a truck used for corporate purposes. Will be able to show all the mileage early. So, almost all the miles done are for company purposes. Including home to college and individual use of insignificance.
 
It is also worth noting that any significant private use, even for a few days. Invalidates the exemption for the whole year. Thus, the full £3,000 annual benefits charge will apply. No reimbursement for actual private use can negate the private use tax charge. Any contribution would only be offset against the full annual charge. The £550 fuel profit will reduce by a complete refund of all-year-round private motor fuel costs. So that where the (more than insignificant). Private mileage is low reimbursement is likely to be cheaper than the tax due on the £550 van fuel benefit.
 
One other point to consider is the definition of a van. Especially in the context of double cabs and hybrids. This is a complex area and depends on the make and model of the specific vehicle. But a van is a construction vehicle of less than 3500 kg built to transport goods or burden (instead of people).

Note:
It is the purpose for which the vehicle design. Which is important (actual usage is irrelevant).  Also, note that HMRC generally accepts double-cab pickups with a payload of one tonne or more as vans. The Land Rover Defender 110 is thus marked as a vehicle with blanked windows behind the second row of seats. Please note that the context under. Which registries of road tax vehicles are likely to accept their position as proof. i.e. categories TC48, 49, 59 are cars whereas categories TC36 and 39 are light goods vehicles).

Please do not hesitate to contact us. If you like some more details/explanation.
Where the CO2 emission number is a few of 5, to assess the charge point. The calculation rounds down to the next many of 5.  For a bi-fuel vehicle which has two CO2emissions figures. You should identify the CO2 band based on engine size as follows:-
 
If its cylinder capacity is 1,400cc or less, use CO2 band 140;
 
Using CO2 band 175 if the cylinder size reaches 1.400cc but does not exceed 2.000 cc;
 
If its cylinder capacity exceeds 2,000cc, use CO2 band 225 or above.

Quarterly ReturnsBusinesses must use these new VAT fuel scale charges from the start of their next prescribed accounting period beginning on or after 1 May 2011.

COband

VAT fuel scale charge 3month period

3-month charge

VAT

VAT exclusive 3-month charge

£

In £

£

120 or less 157.00 26.17 130.83
125 236.00 39.33 196.67
130 252.00 42.00 210.00
135 268.00 44.67 223.33
140 283.00 47.17 235.83
145 299.00 49.83 249.17
150 315.00 52.50 262.50
155 331.00 55.17 275.83
160 346.00 57.67 288.33
165 362.00 60.33 301.67
170 378.00 63.00 315.00
175 394.00 65.67 328.33
180 409.00 68.17 340.83
185 425.00 70.83 354.17
190 441.00 73.50 367.50
195 457.00 76.17 380.83
200 472.00 78.67 393.33
205 488.00 81.33 406.67
210 504.00 84.00 420.00
215 520.00 86.67 433.33
220 536.00 89.33 446.67
225 or more 551.00 91.83 459.17

 

Monthly ReturnsBusinesses must use these new VAT fuel scale charges from the start of their next prescribed accounting period beginning on or after 1 May 2011.

COband

VAT fuel scale charge 1 month period

1-month charge

VAT

VAT exclusive 1 month charge

£

In £

£

120 or less 52.00 8.67 43.33
125 78.00 13.00 65.00
130 84.00 14.00 70.00
135 89.00 14.83 74.17
140 94.00 15.67 78.33
145 99.00 16.50 82.50
150 105.00 17.50 87.50
155 110.00 18.33 91.67
160 115.00 19.17 95.83
165 120.00 20.00 100.00
170 126.00 21.00 105.00
175 131.00 21.83 109.17
180 136.00 22.67 113.33
185 141.00 23.50 117.50
190 147.00 24.50 122.50
195 152.00 25.33 126.67
200 157.00 26.17 130.83
205 162.00 27.00 135.00
210 168.00 28.00 140.00
215 173.00 28.83 144.17
220 178.00 29.67 148.33
225 or more 183.00 30.50 152.50

 

Annual ReturnsBusinesses must use these new VAT fuel scale charges from the start of their next prescribed accounting period beginning on or after 1 May 2011.

COband

VAT fuel scale charge 12 month period

12-month charge

VAT

VAT exclusive 12-month charge

£

In £

£

120 or less 630.00 105.00 525.00
125 945.00 157.50 787.50
130 1,010.00 168.33 841.67
135 1,070.00 178.33 891.67
140 1,135.00 189.17 945.83
145 1,200.00 200.00 1,000.00
150 1,260.00 210.00 1,050.00
155 1,325.00 220.83 1,104.17
160 1,385.00 230.83 1,154.17
165 1,450.00 241.67 1,208.33
170 1,515.00 252.50 1,262.50
175 1,575.00 262.50 1,312.50
180 1,640.00 273.33 1,366.67
185 1,705.00 284.17 1,420.83
190 1,765.00 294.17 1,470.83
195 1,830.00 305.00 1,525.00
200 1,890.00 315.00 1,575.00
205 1,955.00 325.83 1,629.17
210 2,020.00 336.67 1,683.33
215 2,080.00 346.67 1,733.33
220 2,145.00 357.50 1,787.50
225 or more 2,205.00 367.50 1,837.50

 

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