PBR: Company car tax clarification

Today's Pre-Budget Report has confirmed that the CO2 emissions thresholds for Company Car Tax bands will be reduced by 5g CO2 per km from 2012.

In addition, the graduated table of the company car tax bands will be extended downwards to a new 10% band for cars emitting up to 99g CO2 per km, which replaces the existing 10% band.

"The company car taxable benefit arising for an employee is based on the list price of the car multiplied by a percentage – with the relevant percentage depending on the car’s CO2 emissions," explains Dan Rees tax expert at Deloitte.

"Currently the lowest rate is 15% except if the car is a ‘Qualifying Low Emission Car (QUALEC)’ and has emissions of no more than 120g/km of CO2 – in which case the percentage is 10%.

"From 6 April 2012, QUALECs will no longer exist as a separate category but the lowest 10% rate will be available for cars with emissions of no more than 99g/km of CO2.

"The rate would be 11% for cars with emissions of 100g/km of Cos and the bands increase at 1% intervals for each additional 5g/km of CO2."