Tax Efficient Vehicle Selection

Drivers and businesses can save big money through the right choice of vehicle.

The CO2 emission level of a company car will define not only the amount of personal tax a driver pays, but also the Class 1A National Insurance and corporation tax liabilities of the company.

On 1st April 2009, HM Treasury significantly amended the writing down treatment of company cars which means that vehicles with CO2 emissions in excess of 160g/km can only be written down at 10% per annum and the amount of sale proceeds can no longer be used to balance the calculation when the vehicle is sold.

There are a number of key areas to focus on to ensure optimum tax rate applies such as

• Identify the lowest CO2 level in the category of vehicle
• Do not discount high specification or premium brands as the latest engine technology provides some very low CO2 emission values
• If you operate a model choice or purchase price based list, make sure you include CO2 values and if possible make them under 160g/km
• Use the opportunity to reduce your overall fleet CO2 emission levels to sponsor choice list change
• Use a basic tax calculation chart to indicate how much tax will be paid by drivers every month in various CO2 levels and on certain models

UK Fleet Manager can also provide help for your drivers in advising on optimum vehicle selection and do the physical work of locating those models if necessary.

UK Fleet Manager offers guidance and practical assistance to companies selecting company vehicles and managing vehicle choice lists. Contact us to find out how we can make a BIG difference to your company's vehicle costs.