Drive into 2011/1012 in style!

In April 2011 the rules concerning company cars are being completely overhauled.  By looking at your choice of company car now, you can ensure that the changes don’t mean that you pay additional Income Tax on your benefits in kind.

From April 2011 the £80,000 restriction on the price of the car is removed and the reduction in benefit for different types of fuels is removed.  This could mean that simply by keeping your existing company car you could be paying substantially increased income tax without even realising it!

Now is the time to review whether or not having your company to pay for your private fuel would be a better alternative to paying for the fuel yourself.  By comparing your mileage, both business and private to the amounts of tax and fuel costs you could determine which would leave you better off in real cash terms.

As of 1st March 2011, HMRC have also introduced new advisory rates for fuel payments for companies to pay to company car drivers.  The new rates are advised below;

 Engine Size           Petrol          Diesel          LPG
1400cc or less        14p              13p           10p
1401 – 2000cc       16p              13p           12p
over 2000cc           23p              16p           17p

 Simply being aware of the new rules and rates can mean that you are able to make an informed decision when it comes to choosing company cars and meeting the fuel costs.

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