carl

In noticed yesterday that the emissions on a MY03 WRX are sufficiently low to make it a 27% tax band car for the purposes of company car tax (MY02 was 32%).

Was thinking of getting something cheap as a company car, but a WRX+PPP is starting to look sensible. As a company director I can adjust my salary such that I remain in the 22% tax band then, AFAICS, the sums go like this:
Car: £19,950 + PPP £1600 = £21,550
Taxable benefit: £21,550 *0.27 = £5818.50 per year
Tax on £5815.50 is 0.22*£5818.50 = £1280.07
Per month is £106.67

So I could have a new Scoob for only £100 pm in company car tax

Of course, there's the obvious difficulty that my company doesn't actually have £21.5k in reserves at the moment, but it's certainly worth thinking about for the future.

-=Buzz=-

dont forget your fuel tax - either a lump sum and they take so much every week, or you can "keep records" of private mileage and mpg/ppl etc etc and pay it at intervals (like I do).

Still, you're the boss, GET ONE!

naturbo2000

and you forgot to add on metallic paint

wouldn't want all that money to look like a fridge

Beemer_Deano

This is the route I'm planning on going. I've currently got a WRX on lease - it's up in August and to be honest if Subaru hadn't lowered the CO2 emmissions the tax (particularly the new £2000 fuel benefit increase) would have meant goodbye Scoob. Now the PPP is within my budget due to the price drop, and the lower tax makes it a (fairly ) sensible choice.
If you're considering leasing, be sure to get a quote from a dealer - I don't know about right now, but 2 years ago they gave me by far the cheapest quote.

Deano

carl

Don't like the idea of leasing as (a) the mileage done will be >25k per annum and (b) you have to pay penalty charges to get out of the contract early. I can't predict what will be happening with my company (or whether I'll have one ) in 36 months.

However, it's also occurred to me that the tax rate is 27% this year (i.e. to 4 April) but it will be higher next year and the year after as they gradually bring the bottom emissions bracket down from 165 g/km to 145 g/km (it's 15% at the bottom one, then +1% for each 5 g/km above that IIRC).

Anyone know any good company car tax calculators? The Lex Vehicle Leasing one seems to not work if you select a MY03 Scoob

-=Buzz=-

I tried loads of sites when working out if I could get a scoob ~(would have had to have been a five door though so it was "practical" :-/ ) but... cant remember any of the sites

I just did a search for "company car tax calculators" on google, but they all assumed a basic level of info that you had to have ie tax bracket, otr price etc etc.

carl

That's why the LVL one is usually good. It has the vehicle emissions database, so can calculate the banding for you. Mind you, when there is no data it assumes the minimum level, which is how I was momentarily convinced I could have had a new Cerbera 4.5 for just over £100 pm

orbv

when fitting a ppp to the car the emissions are unknown so you go back to the old tax system.

Beemer_Deano

Carl, just thinking back to your original message - don't forget that unless you're going to do something sneaky there's no point massaging your wage to stay within the 22% bracket. You're right to be cautious about how the tax rises every year and I can see where you're coming from on the leasing - it can be a big headache if it's your company (it's not mine, so I didn't have to worry ). Having said that, my boss is pretty happy at the moment as we had talked about buying it, so we've missed out on the depreciation aspect.

When you get the sharp pencil out and do the sums, remember to include the smile factor on the plus side - gotta be worth a couple of grand to the tax man

Good luck,

Deano

Beemer_Deano

That loophole only applies to cars registered prior to '98 and imports from outside Europe, and even then the Scoob would be taxed at 25% (35% if you go for a car over 2000cc ). Any European/UK car will have the emissions figure on the V5 and the Inland Revenue will use it, no matter how modded the car is. In the case of a WRX that'll be 27% of the value for 2003-04, 29% for 2004-05 and so on (until they realise no-one can afford to run a car ). The tax figure won't go up when PPP is fitted, but the "new" tax system certainly still applies.

Someone here kindly filled me in on this earlier in the year, and I've since confirmed it with my dealer and the Inland Revenue

Deano

*edit* BTW there's a simple tax calculator here - just watch it if you're borderline to the 40% tax bracket as it only does one or the other (I've yet to see a calculator that takes this into account)

carl

Deano -- you're right. The PPP makes no difference as the tax rate is only based on the emissions on the type approval certificate. As you fit the PPP after you've bought the car you're OK, but you are taxed at 27% of the PPP price as well as, I assume, it's a "fitted accessory".

P20SPD

iTrader: (1)

Simple question, dont take it the wrong way.

Pressumably your salary is at its currently level, to meet your personal needs, if you reduce your salary to stay in the 22% band, your net income will obviously drop, so how will you meet your personal needs?

Steven

carl

George W Bush

Get an EVO 6 instead...I just got one and seeing as there are no official co2 levels my accountants got it down to 22%!!!! I cant believe it!! Hope no-one from the tax office is reading this.

carl

Not keen on being taxed on any proportion of a £31k-list-price Evo 6

john_s

iTrader: (1)

I've heard of people having dealers invoice companies separately for accessories. The second invoice then may (or may not - ahem!) be declared as part of the value of the car

John