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Tax
Rates & Allowances 2008-09
Tax
Allowance on Vehicles
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Petrol
and Diesel Car Benefits System
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The
taxable benefit is calculated as a percentage of the car's UK
list price. The calculation begins with the car's CO2 emissions
in grams per kilometre. Then deduct 140 and divide the result
by 5. Round down (4.9 = 4) and then add 15 (petrol) or 18(diesel).
The result is the taxable percentage. Normal minimum rates are
petrol 15%, diesel 18%, and the maximum rate for petrol and
diesel is 35%. The lower threshfold is reduced to 135g/km and
is unaffected by the 10% band.
Reliable
emissions data is not widely available for cars first registered
before 1st January 1998. For them the taxable percentage figures
are:
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Chargeable
on employees earning £8,500 or over (including benefits)
and directors
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- The
list price relates to the day before first registration and
includes accessories. The price is subject to an upper limit
of £80,000
- The
list price is reduced by the employees capital contribution
when the car is first made available, subject to a maximum
deduction of £5,000
- Van,
restricted private use condition not met, van benefit
£3,000, fuel £500
- Payments
by employees for private use may reduce the above benefits
- Cars
which run on E85 fuel qualify for a 2% reduction in the appropriate
percentage (except QUALECS)
- Cars
with O2 emissions up to and including 120g/km will be charged
at 10% of the list price. These cars will be referred to as
Qualifying Low Emission Cars (QUALECS). A 3% diesel charge
will apply but the E85 fuel reduction will not.
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HM
Revenue & Customs Mileage Rates
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Car:
Approved rates for employees using their own cars of business
are 40p per mile for the first 10,000 miles and 25p per mile thereafter.
Income Tax and NICs maybe due on higher rates and tax relief on
lower rates
Fuel:
Advisory rates for employee private mileage reimbursement or employer
reimbursement of business mileage are published by HM Revenue
& Customs for time to time. |
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Car
Fuel Benefit
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| When
the cost of all fuel for private use is borne by the employee,
the fuel benefit is nil. Otherwise, the taxable benefit
is calculated as the car benefit percentage (see above) of £16,900. |
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Corporation Tax
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| Financial
Year to |
2007/08
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2008/09
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| Taxable
Profits |
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First £300,000
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20%
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21%
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Next
£1,200,000
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32.5%
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29.75%
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Over
£1,500,000
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30%
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28%
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Main
Capital Allowances
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IBA & ABA |
3% |
Straight
line based upon cost (note 2) |
| Plant
& Machinery |
20% |
Reducing
balance |
| Annual
Investment Allowance (AIA) |
100% |
On
1st £50k investment in plant & machinery |
| Long-life
assets |
10% |
Previously
6% |
| Integral
Features |
10% |
Category
Introduced |
| Low
Emission Cars |
100% |
New
Cars with emissions < 110g/km CO2 |
| Energy
Efficient Plant |
100% |
Details
at eca.gov.uk (note 4) |
| Research
& Development |
100% |
Assets
used solely for qualifying R&D |
1.
The small companies rate will increase to 22% in 2009/10
2. This will be reduced by 1% pa & will be abolished by
1 April 2011
3.Expenditure in excess of the AIA in a yr qualifies for WDA
at 20%
4. Subject to cap, 1st yr tax credits available at 19% of
the loss attributable to ECAs.
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Tax
Rates & Allowances Continue >
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