Cars

Vans up to 3.5 Tonnes

• If you are a sole trader or a partner and acquire a car through your business, or privately, you make a claim against your self assessment tax bill to claim the costs of your business mileage.
• If you are a company director, or your pay - including the value of your benefits – is more than £8500 per year, then you’ll always have to pay tax on any extra benefits you get.
• The company car is the largest and commonest benefit for most companies and HMRC have set rules to calculate its salary equivalent.
• Any contributions you make, as the driver, towards the cost of your vehicle need to be taken into account i.e. the value of the taxable benefit may be less.
• You also need to take into account how long you have had the car for in the relevant financial year.
• Work out your car P11D taxable list price, which is the list price of the car including accessories, plus delivery charges and taxes due.
• Then find out the car CO2 output figure for your vehicle. -The type of fuel the car uses also matters since diesel attracts a 3% penalty. In the past this was because diesel had higher levels of non-CO2 pollutants (or particulates).
• Multiply the P11D taxable list price by the percentage based on your car CO2 output (and fuel type) to calculate the taxable benefit.
• Multiply this by your rate of income tax to see what you will have to pay.
• Employees will also be taxed if their employer provides fuel for private use.
• This could be as a result of using a company fuel card and not repaying the private usage element.
• The fuel benefit for 2010-2011 is simply calculated by multiplying a fixed sum of £18,000 by the taxable percentage based on the car CO2 output.
  

• The same principles apply to van drivers
• For 2010/11 a flat reportable P11D value of £3000 applies to all company vans for private use.
• Vans with a second row of seats such as double-cab pickups can still qualify as vans provided they have a one tonne payload, even when a hardtop is fitted. 
• The £3000 can be reduced if the following applies.                                                                    

1. The van is unavailable for part of the year (as with cars however the van must have been unavailable for a minimum of 30 consecutive days to qualify for a reduction).
2. You make a contribution towards the private use of the van.
3. The van is shared – in this case the £3000 is divided on an appropriate basis between each of the drivers.

• 2010/11 Van fuel benefit applies if the £3000 charge above is applied and fuel available for free private use
• The 2010/11 Van fuel benefit is a flat rate of £550.
• The taxman does not count driving the van between home and work as private mileage.
• So if you take the van home at night and do no other mileage, you do not have to pay company van tax.