Company Cars
There is a lot of talk these days about going green, carbon footprints etc. As a small business you’d be forgiven for thinking that the tax breaks to encourage “greener” living are just for the likes of ICI and other large industrial companies, but the Revenue have introduced a generous scheme to encourage small business owners to do more for the environment.
The scheme concerns Company cars. Historically providing a company car to an employee has been very expensive from a tax point of view but no longer – at least for certain cars. Those cars which have CO2 emissions of not more than 110g per kilometre driven qualify for 100% allowances within the Company – this means that if the car costs £20,000 you can offset the whole amount against your Company profits in year 1. Previously this would have been spread over at least 4 years.
The benefit in kind charge (the tax payable by the employee) is also reduced to 10% of the list price of the car for cars with a CO2 emission rate of 120g/km or less (as of 6 April 2008). This lower rate is increased to 13% for diesel cars due to a 3% diesel supplement. The benefit in kind charge for electric-only cars is calculated at 9% of the list price.
How then does this relate to actual tax savings? Take the example of a Toyota Prius with a list price of £20,000 and a CO2 emission rate of 104g/km. In year one the Company can write off the whole cost of the car against its profits, meaning a tax saving of £20,000 x 20% i.e. £4000.
The benefit in kind on the employee would be £20,000 x 10% = £2,000. This would cost a Higher Rate tax payer £800 in tax with the Company paying an extra £256 a year in Class 1a National Insurance.
This then is a tax saving in year 1 of £2,944. Remember as well that the Company will pay for all the repairs, tax, business fuel and insurance on the car, reclaiming VAT where applicable and obtaining corporation tax savings on all costs.
So, the tax breaks are good, but are the cars that qualify worth the extra savings? Personal choice of course, but below are the ones that are currently available, and you may want to check out www.green-car-guide.com for more details.
| Make | Model | Version |
| REVA | G-Wiz | DC electric car Auto |
| REVA | G-Wiz | AC electric car Auto |
| SAKURA | Maranello | Maranello4 Electric |
| AIXAM | Nice | Nice |
| TOYOTA | Prius | 1.5 T Spirit |
| TOYOTA | Prius | 1.5 T3 |
| TOYOTA | Prius | 1.5 T4 |
| CITROEN | C1 | 1.0i Airplay 5 door |
| TOYOTA | Aygo | 1.0 VVTi Black 5-door |
| CITROEN | C1 | 1.0i Vibe 3 door |
| TOYOTA | Aygo | 1.0 VVTi Black 5-door MMT |
| CITROEN | C1 | 1.0i Vibe 5 door |
| TOYOTA | Aygo | 1.0 VVTi Blue 3-door |
| TOYOTA | Aygo | 1.0 VVTi Blue 3-door MMT |
| TOYOTA | Aygo | 1.0 VVTi Blue 5-door |
| TOYOTA | Aygo | 1.0 VVTi Blue 5-door MMT |
| HONDA | Civic Hybrid | 1.4 IMA ES CVT 4dr |
| PEUGEOT | 107 | 1.0 Urban lite 3dr |
| PEUGEOT | 107 | 1.0 Urban 3dr |
| PEUGEOT | 107 | 1.0 Urban Move 3dr |
| PEUGEOT | 107 | 1.0 Urban 3dr auto |
| TOYOTA | Aygo | 1.0 VVTi + 3-door |
| PEUGEOT | 107 | 1.0 Urban 5dr |
| TOYOTA | Aygo | 1.0 VVTi + 3-door MMT |
| PEUGEOT | 107 | 1.0 Urban Move 5dr |
| TOYOTA | Aygo | 1.4 D-4D + 3-door |
| PEUGEOT | 107 | 1.0 Urban 5dr auto |
| TOYOTA | Aygo | 1.0 VVTi + 5-door |
| PEUGEOT | 107 | 1.0 Sport XS 3dr |
| TOYOTA | Aygo | 1.0 VVTi + 5-door MMT |
| TOYOTA | Aygo | 1.4 D-4D + 5-door |
| CITROEN | C1 | 1.0i Rhythm 3 door |
| TOYOTA | Aygo | 1.0 VVTi 3-door |
| CITROEN | C1 | 1.0i Rhythm 5 door |
| TOYOTA | Aygo | 1.0 VVTi 5-door |
| CITROEN | C1 | 1.4HDi 55 Rhythm 5 door |
| TOYOTA | Aygo | 1.0 VVTi Black 3-door |
| CITROEN | C1 | 1.0i Airplay 3 door |
| TOYOTA | Aygo | 1.0 VVTi Black 3-door MMT |
| SMART | fortwo cabrio | 0.7 Pulse |
| SMART | fortwo cabrio | 0.7 Pure |
| CITROEN | C2 | 1.4 HDi L |
| CITROEN | C2 | 1.4 HDi Design |
| CITROEN | C2 | 1.4 HDi Furio |
| SMART | fortwo coupe | 0.7 Pulse |
| CITROEN | C2 | 1.4 HDi SX |
| SMART | fortwo coupe | 0.7 Pure |
| SMART | fortwo coupe | 0.7 Pure 50bhp |
| DAIHATSU | Charade | 1.0 3-door |
| DAIHATSU | Charade | 1.0 5-door |
| FIAT | Panda | 1.3 16v Multijet Dynamic |
| CITROEN | C3 | 1.4HDi L |
| CITROEN | C3 | 1.4HDi Desire |
| SMART | fortwo cabrio | 0.7 Pulse with Softouch |
| SMART | fortwo cabrio | 0.7 Pure with Softouch |
| SMART | fortwo coupe | 0.7 Passion Softouch |
| PEUGEOT | 206 3 Door | 1.4 HDi 70 Look |
| SMART | fortwo coupe | 0.7 Pulse with Softouch |
| PEUGEOT | 206 5 Door | 1.4 HDi 70 Look |
| SMART | fortwo coupe | 0.7 Pure 50bhp with Softouch |
| SMART | fortwo coupe | 0.7 Pure with Softouch |
| FORD | Fiesta 3dr | 1.6 Duratorq TDCi Zetec Climate |
| FORD | Fiesta 3dr | 1.6 Duratorq TDCi Zetec S |
| FORD | Fiesta 5dr | 1.6 Duratorq TDCi Ghia |
| FORD | Fiesta 5dr | 1.6 Duratorq TDCi Zetec Climate |
| SMART | forfour | 1.5 cdi Passion 68bhp |
| SMART | forfour | 1.5 cdi Pulse 68bhp |
| SMART | fortwo cabrio | 0.7 Passion Softouch |
| RENAULT | Clio III | 1.5 DCi Expression 86 3-dr |
| RENAULT | Clio III | 1.5 DCi Dynamique 86 3-dr |
| RENAULT | Clio III | 1.5 DCi Dynamique S 86 3-dr |
| RENAULT | Clio III | 1.5 DCi Expression 86 5-dr |
| RENAULT | Clio III | 1.5 DCi Privilege 86 5-dr |
| RENAULT | Clio III | 1.5 DCi Dynamique 86 5-dr |
| HYUNDAI | Getz | 1.5 CRTD GSi 5-dr |
| MINI | Cooper New | 1.6 D |
| CITROEN | C3 | 1.6HDi 16V 92bhp SX |
| CITROEN | C3 | 1.6HDi 16V 92bhp Exclusive |
| RENAULT | Clio III | 1.5 DCi Expression 86 Quickshift5 3-dr |
| RENAULT | Clio III | 1.5 DCi Expression 86 Quickshift5 5-dr |
| DAIHATSU | Sirion | 1.0 S |
| DAIHATSU | Sirion | 1.0 SE |
| FIAT | Grande Punto 3 door | 1.3 16v Multijet 75 Active Aircon |
| TOYOTA | Yaris | 1.4 D-4D T3 5-door |
| FORD | Fusion | 1.4TDCi Duratorq Style Climate |
| FIAT | Grande Punto 5 door | 1.3 16v Multijet 75 Active |
| TOYOTA | Yaris | 1.4 D-4D T3 5-door MMT |
| FORD | Fusion | 1.4TDCi Duratorq Pursuit |
| FIAT | Grande Punto 5 door | 1.3 16v Multijet 75 Active Aircon |
| TOYOTA | Yaris | 1.4 D-4D Zinc 3-door |
| FORD | Fusion | 1.4TDCi Duratorq Pursuit Climate |
| FIAT | Grande Punto 3 door | 1.3 16v Multijet 75 Dynamic |
| TOYOTA | Yaris | 1.4 D-4D Zinc 3-door MMT |
| FORD | Fusion | 1.4TDCi Duratorq Zetec Climate |
| FIAT | Grande Punto 5 door | 1.3 16v Multijet 75 Dynamic |
| TOYOTA | Yaris | 1.4 D-4D Zinc 5-door |
| FORD | Fusion | 1.6TDCi Duratorq Zetec Climate |
| FORD | Fiesta 3dr | 1.4i Duratorq TDCi Studio |
| RENAULT | Modus | 1.5 DCi 86 Dynamique Auto |
| TOYOTA | Yaris | 1.4 D-4D Zinc 5-door MMT |
| FORD | Fiesta 3dr | 1.4i Duratorq TDCi Freedom |
| RENAULT | Modus | 1.5 DCi 86 Expression Auto |
| TOYOTA | Yaris | 1.4 D-4D TR 3-door |
| FORD | Fiesta 3dr | 1.4i Duratorq TDCi Style |
| RENAULT | Modus | 1.5 DCi 86 Initiale Auto |
| TOYOTA | Yaris | 1.4 D-4D TR 3-door MMT |
| FORD | Fiesta 3dr | 1.4i Duratorq TDCi Style Climate |
| RENAULT | Modus | 1.5 DCi 86 Privilege Auto |
| TOYOTA | Yaris | 1.4 D-4D TR 5-door |
| FORD | Fiesta 3dr | 1.4i Duratorq TDCi Silver |
| TOYOTA | Yaris | 1.4 D-4D TR 5-door MMT |
| TOYOTA | Yaris | 1.4 D-4D SR 3-door |
| FORD | Fiesta 3dr | 1.4i Duratorq TDCi Zetec Climate |
| VAUXHALL | Corsa 3-door | 1.3CDTi 16v Club CO2RSA 75PS |
| TOYOTA | Yaris | 1.4 D-4D SR 3-door MMT |
| VAUXHALL | Corsa 3-door | 1.3CDTi 16v Club CO2RSA 75PS (a/c) |
| TOYOTA | Yaris | 1.4 D-4D SR 5-door |
| VAUXHALL | Corsa 3-door | 1.3CDTi 16v Life CO2RSA 75PS |
| TOYOTA | Yaris | 1.4 D-4D SR 5-door MMT |
| FORD | Fiesta 5dr | 1.4i Duratorq TDCi Ghia |
| VAUXHALL | Corsa 3-door | 1.3CDTi 16v Life CO2RSA 75PS (a/c) |
| TOYOTA | Yaris | 1.4 D-4D T Spirit 3-door |
| VAUXHALL | Corsa 5-door | 1.3CDTi 16v Club CO2RSA 75PS |
| TOYOTA | Yaris | 1.4 D-4D T Spirit 3-door MMT |
| FORD | Fiesta 5dr | 1.4i Duratorq TDCi Style |
| VAUXHALL | Corsa 5-door | 1.3CDTi 16v Club CO2RSA 75PS (a/c) |
| TOYOTA | Yaris | 1.4 D-4D T Spirit 5-door |
| FORD | Fiesta 5dr | 1.4i Duratorq TDCi Style Climate |
| VAUXHALL | Corsa 5-door | 1.3CDTi 16v Life CO2RSA 75PS |
| TOYOTA | Yaris | 1.4 D-4D T Spirit 5-door MMT |
| FORD | Fiesta 5dr | 1.4i Duratorq TDCi Zetec Climate |
| VAUXHALL | Corsa 5-door | 1.3CDTi 16v Life CO2RSA 75PS (a/c) |
| TOYOTA | Yaris | 1.4 D-4D T2 3-door |
| VOLKSWAGEN | Polo | 1.4 TDi S 70PS 3 door |
| TOYOTA | Yaris | 1.4 D-4D T2 5-door |
| FORD | Fusion | 1.4TDCi Duratorq Plus |
| VOLKSWAGEN | Polo | 1.4 TDi S 70PS 5 door |
| TOYOTA | Yaris | 1.4 D-4D T3 3-door |
| FORD | Fusion | 1.6TDCi Duratorq Plus |
| VOLKSWAGEN | Polo | 1.4 TDi SE 80PS 3 door |
| FIAT | Grande Punto 3 door | 1.3 16v Multijet 75 Active |
| TOYOTA | Yaris | 1.4 D-4D T3 3-door MMT |
| FORD | Fusion | 1.4TDCi Duratorq Style |
| VOLKSWAGEN | Polo | 1.4 TDi SE 80PS 5 door |
| RENAULT | Megane Hatch | 1.5 DCi 86 Extreme |
| PEUGEOT | 207 5 Door | 1.4 HDi S 70 |
| RENAULT | Megane Hatch | 1.5 DCi 106 Privilege 6 speed |
| PEUGEOT | 207 5 Door | 1.4 HDi S 70 with AC |
| RENAULT | Megane Sport Hatch | 1.5 DCi 106 Dynamique 6 speed |
| PEUGEOT | 207 5 Door | 1.6 HDi S 200 with AC |
| RENAULT | Megane Sport Hatch | 1.5 DCi 86 Dynamique |
| PEUGEOT | 207 5 Door | 1.6 HDi SE Premium 200 |
| RENAULT | Megane Sport Hatch | 1.5 DCi 86 Extreme |
| PEUGEOT | 207 5 Door | 1.6 HDi Sport 200 |
| PEUGEOT | 207 5 Door | 1.4 HDi Urban 70 |
| RENAULT | Modus | 1.5 DCi 86 Dynamique |
| RENAULT | Modus | 1.5 DCi 86 Expression |
| RENAULT | Modus | 1.5 DCi 86 Initiale |
| CITROEN | C3 | 1.6HDi 16V 110bhp VTR |
| RENAULT | Modus | 1.5 DCi 86 Privilege |
| CITROEN | C4 Coupe | 1.6HDi 16V 110bhp VTR+ EGS |
| CITROEN | C4 Hatch | 1.6HDi 16V 110bhp SX EGS |
| CITROEN | C4 Hatch | 1.6HDi 16V 110bhp VTR+ EGS |
| SKODA | Fabia New | 1.4 TDI PD Fabia 1 80bhp |
| RENAULT | Megane Hatch | 1.5 DCi 86 Authentique |
| PEUGEOT | 207 3 Door | 1.4 HDi S 70 |
| SKODA | Fabia New | 1.4 TDI PD Fabia 2 80bhp |
| RENAULT | Megane Hatch | 1.5 DCi 106 Dynamique 6 speed |
| PEUGEOT | 207 3 Door | 1.4 HDi S 70 with AC |
| SKODA | Fabia New | 1.4 TDI PD Fabia 3 80bhp |
| RENAULT | Megane Hatch | 1.5 DCi 86 Dynamique |
| PEUGEOT | 207 3 Door | 1.6 HDi S 200 with AC |
| RENAULT | Megane Hatch | 1.5 DCi 106 Expression 6 speed |
| PEUGEOT | 207 3 Door | 1.6 HDi Sport 200 |
| RENAULT | Megane Hatch | 1.5 DCi 86 Expression |
| PEUGEOT | 207 3 Door | 1.4 HDi Urban 70 |
