Mileage adds benefit to the company car
Friday 10 March 1995
The taxable value of a company car is 35 per cent of the list price plus accessories. But this is reduced by one-third where between 2,500 and 16,000 business miles are driven during the tax year. And it goes down by two-thirds if more than 18,000 business miles are driven.
So if the list price is, for example, £17,142, the taxable value, at 35 per cent of that, is £6,000. Tax on £6,000 at 25 per cent is £1,500; at 40 per cent it is £2,400.
But the taxable value would fall to £4,000 once 2,500 business miles have been clocked up - reducing the tax to £l,000 for 25 per cent taxpayers and £1,800 for 40 per cent taxpayers.
On business mileage of 18,000 miles and over, the taxable value in this example would fall to £2,000 and the tax bill would be £500 (at 25 per cent) or £800 (at 40 per cent).
There are clearly significant potential tax savings for people who are close to either mileage threshold. Making a few more business trips before 5 April could be very profitable.
There is a further reduction of one-third in the taxable value if the car is at least four years old by the end of the tax year.
So think twice before urging your employer to replace your car with the latest model.
- 1 Nigel Farage: Me vs Russell Brand on Question Time – he's got the chest hair but where are his ideas?
- 2 Harry Potter fans can apply to the Hogwarts-inspired College of Wizardry
- 3 Jessica Chambers: 19-year-old woman 'doused with lighter fluid and burned alive' in the US
- 4 Russell Brand calls Nigel Farage 'poundshop Enoch Powell' in BBC Question Time debate
- 5 Orange Wednesdays are no more
Weather bomb in pictures: Storms cuts power for tens of thousands – and snow is on the way
Jessica Chambers: 19-year-old woman 'doused with lighter fluid and burned alive' in the US
Russell Brand calls Nigel Farage 'poundshop Enoch Powell' in BBC Question Time debate
Russell Brand was rendered speechless on Question Time by this man
Fury at Airbus after it hints the super-jumbo may be mothballed
Disgruntled RBS worker writes hilarious open letter to Russell Brand after anti-capitalist publicity stunt leaves him hungry
Shock poll shows voters believe Ukip is to the left of the Tories
Nigel Farage's approval rating hits 'record low' as popularity suffers in wake of Ukip sex scandal
Nigel Farage defends Kerry Smith 'ch***y' comment: 'If you are going for a Chinese, what do you say you’re going for?'
Ukip candidate jokes about 'shooting peasants' in racist and homophobic rant
Pakistan school attack live: Taliban kill at least 132 children in 'horrifying' massacre
iJobs Money & Business
$200 - $350 per annum: Carlton Senior Appointments: Managing Producer Office...
$125 - $225 per annum: Carlton Senior Appointments: San Fran - Investment Advi...
Up to £70,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...
Up to £65,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...