Speak EV - Electric Car Forums banner

1 - 5 of 5 Posts

·
Registered
Joined
·
625 Posts
Discussion Starter #1
I posted on the LEAF forums but could be equally valid for anyone considering an Ampera as a Company Car option:

Companies cars account for 50% of new car sales in the UK and one key consideration for anyone choosing a company car is that amount of Benefit in Kind Company Car Tax that you have to pay. This is collected direct through your tax code and is linked to the CO2 emissions of the chosen vehicle. These are emissions are grouped into CO2 bands and and year on year these have increased by 1% encouraging drivers to choose lower emitting vehicles. All good thus far....

In 2010 the then Labour UK Government announced a 0% Company Car tax rate for vehicles with zero emissions, and a lower rate of 5% for petrol cars that emit between 1-75g/km (8% for Diesel). However in the March 2012 budget the Conservative chancellor announced major changes to these low emitting cars highlighted in the following table:

http://mynissanleaf.files.wordpress.com/2012/07/company-car-tax-table.jpg
(can't display in this forum due to image formatting restrictions)

So what? I hear you say; well lets break out this into a scenario; here is a mix of zero and low emission cars you can buy today and the huge jump in CCT tax for Zero Emission cars from 2015 onwards:

http://mynissanleaf.files.wordpress.com/2012/07/ev-car-table-company-car-tax-2.jpg
(can't display in this forum due to image formatting restrictions)

So the key points to keep in mind here is that if you buy a Zero Emission car, like a Nissan LEAF, on a 4 year lease you will be paying £157 per month CCT in the final year versus £0 today. That makes it MORE expensive than a VW Golf Bluemotion Diesel pumping out 99g/km of CO2 at £106 per month in that same 4th year of your lease. This is a key component as to why I chose a Nissan LEAF on a 3 year lease.

Other key points to consider:
- Due to the way CCT is calculated (list price of car x CO2 band x your tax rate (20%/40%) then high costing low emitting cars get hit hard
- The £37,690 Vauxhall Ampera is not a Zero Emission car. It has an official rating of 27 CO2 which means a higher rate tax payer pay £753 a year in 2012 rising to £2,261 a year by April 2016.
- When the Nissan LEAF production moves to Sunderland in 2013 there is rumored to be a price drop, versus today being shipped from Japan this could lower the CCT by as much as 25% (dependent on the final retail price of the UK LEAF).
- All cars under 75 CO2 emissions will be in the same band by 2016 removing a valuable tax incentive to choose lower or zero emission cars
- This removal of incentives for zero emission cars could hit Nissan at the time when they are staring production the Nissan LEAF in Sunderland in 2013


Link to original article: http://mynissanleaf.wordpress.com/2012/ ... -the-tail/

About the Author: http://about.me/grantthomas
 

·
Registered
Joined
·
16,899 Posts
I don't think any of this is new and should be made clear to anyone who takes up a company car before they agree to it.

There may be an optimal point for the employee to purchase the car, versus paying the CCT each year.
 

·
Registered
Joined
·
589 Posts
Yes, this has been known for some time. I made mention of it elsewhere on the forum. The BIK on the Ampera is going to rise from the current 5% to 7%, then 9%, 13% and 16% in consecutive years.
 

·
Conflicted Ecoworrier/Petrolhead
Joined
·
3,225 Posts
Yep - mine bought through my Ltd co - at year 4 I'll be selling the car from the company to myself as at that point it a) will have depreciated significantly a be a cheap buy for me personally b) that means the corporation tax I have to pay on the sale (as it adds to profits) will be reduced to 20% of whatever the car is worth at the time, c) the BiK (or CCT as mentioned above), will still be based on the original £39,400 list price , not the market value and using the using the 13% BiK rate which is a lot to pay on a 4 year old car.

At that point then it's cheaper to transfer ownership to mysefl from the company and claim mileage. More likely - I'll buy a new Model 3 and start over. I could do with something capable of 150+ mile range as I never know where I'm working from one year to the next.

Don't forget you pay Tax through PAYE and NI - via a P11d. I'd not realised there was an NI charge due when I ordered mine! Never seems to get mentioned much. Same rules apply but the 12.8% NI rate is used instead of your 20%/40% tax rate.
 
1 - 5 of 5 Posts
Top