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14/12/2009
Budget Gloom On Company Cars
It has emerged that UK businesses buying company cars may be facing a dramatic hike in tax.
December's pre-Budget report is expected to result in a £120m increase in the amount of tax due when the government reduces the number of cars eligible for the current 10% company car tax by making it only for those emitting 99g of CO2 per km.
Currently, this stands at 120g, with just three cars in production here that would meet the government's stringent new target, which will be introduced from April 2012.
The industry average emission is 158g, so meeting the 99g target will require car makers to introduce technology such as start-stop, whereby the engine cuts off when a car is stable.
Despite this, the automotive industry was said today to be 'bullish' about meeting the government's targets by 2012 and welcomed the new incentives for electric company cars and vehicles.
In this week's pre-Budget report, Alistair Darling announced that electric vehicles would be made exempt from company car tax from 2010 and that a 100% first-year capital allowance would be introduced for electric vans, meaning buying such vans would be taxed as investment in the business, rather than a company vehicle.
To date, more than 900,000 vehicles have been sold to businesses this year, despite the recession, but as little as 50 are believed to have been electric.
The government hopes to make electric vehicles more attractive as it attempts to lower the UK's carbon emissions, although it is only budgeting for the scheme to reduce tax revenues by £5m a year.
(BMcC/KMcA)
December's pre-Budget report is expected to result in a £120m increase in the amount of tax due when the government reduces the number of cars eligible for the current 10% company car tax by making it only for those emitting 99g of CO2 per km.
Currently, this stands at 120g, with just three cars in production here that would meet the government's stringent new target, which will be introduced from April 2012.
The industry average emission is 158g, so meeting the 99g target will require car makers to introduce technology such as start-stop, whereby the engine cuts off when a car is stable.
Despite this, the automotive industry was said today to be 'bullish' about meeting the government's targets by 2012 and welcomed the new incentives for electric company cars and vehicles.
In this week's pre-Budget report, Alistair Darling announced that electric vehicles would be made exempt from company car tax from 2010 and that a 100% first-year capital allowance would be introduced for electric vans, meaning buying such vans would be taxed as investment in the business, rather than a company vehicle.
To date, more than 900,000 vehicles have been sold to businesses this year, despite the recession, but as little as 50 are believed to have been electric.
The government hopes to make electric vehicles more attractive as it attempts to lower the UK's carbon emissions, although it is only budgeting for the scheme to reduce tax revenues by £5m a year.
(BMcC/KMcA)
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