If you have a company car, then your personal tax code will have now been updated for this year by HMRC, so that they can start deducting the tax cost of it from your salary.
If you have chosen a car that is not tax efficient, this then this will likely be costing you thousands unnecessarily.
The answer to the big question has changed!
The big question we get asked frequently, is “how should I own my car - in the company or personally?” The advice we would give to answer this question has changed slightly, but in general it is now fairly simple.
If your car has a high P11D value, in other words, a high level of Co2 emissions, then you should not own it in the company if you want to keep your tax low.
The only cars worth owning in a company are electric cars. This is because the Company can get 100% first year allowances and the personal tax paid on them (via your PllD) is still, relatively, low.
If only an expensive, high co2 car, will do (a Range Rover Sport for example) then its better to keep this out of the company and then claim mileage each time you use if for business purposes.
Our client Jon (pictured) came to us recently to discuss his company car situation, and after a conversation to talk about what was best for him, he took the advice, got rid of his gas guzzling BMW and is now the proud owner of a new electric car, purchased through his business.
We don’t like the tax tail wagging the dog, but we also don’t like to see high tax being paid unnecessarily.
If you feel you are paying too much tax on your company car then contact us to discuss your options.
