Whether buying or leasing your company car there is a lot of talk about going green, carbon footprints etc. HM Revenue & Customs have introduced a generous scheme to encourage small business owners to do more for the environment. The scheme concerns Company cars.
Prevously providing a company car to an employee has been very expensive from a tax point. However this is no longer for certain cars.
Those cars which have CO2 emissions of not more than 95g per kilometre driven qualify for 100% allowances within the Company “ this means that if the car costs £20,000 you can offset the whole amount against your Company profits in year 1.
Previously this would have been spread over at least 4 years. This can be a big help especially for businesses in their first few years of trading.
The company car tax paid by your employee is also reduced. Which is an added benefit when you are looking to take on new staff.
People used to worry about how much they were loosing on their salarys with company cars. With the new rulings on these types of cars at least it is not costing your employees masses in extra taxes.
Remember as well that you Company will pay for all the repairs, tax, business fuel and insurance on the car, reclaiming VAT where applicable and obtaining corporation tax savings on all costs.