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Company car tax warning

06 February 2008
Categories: News , Companies
Budget likely to encourage environmentally friendly behaviour

Public speculation has begun on what the Alistair Darling's inaugural Budget will contain.

Controversial reforms to capital gains tax, income shifting and residence status are a given when the Chancellor speaks to the Commons on 12 March.

And there will also be changes to company car taxation, Bourne Business Consulting has warned.

Alastair Kendrick, a partner at the tax specialist company, said the move is likely to encourage environmentally friendly behaviour.

Last year, the Government published its preferred option for a new company car capital allowance regime:

  • 100% relief on cars with a CO2 emission level of 120g/km or lower.
  • Including cars with CO2 emissions of 121-165g/km in the 25% general plant and machinery tax capital allowance pool, which falls to 20% from April 2008
  • A lower capital allowance rate for cars with CO2 emissions above165g/km.

Alastair Kendrick said: 'Businesses operating large car fleets, including the leasing sector, need to be aware that the Government clearly plans significant tax changes.

'These proposals are likely to impact on the cost to employers of providing company cars, leading many to consider whether to carry on or to find alternative ways of doing so.'

Sections - corporation tax

Categories: News , Companies
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