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Company
cars and tax (TA 4)
A valuable perk
Company cars are one of the most popular
employee benefits. Altogether, 1.7 million UK directors and employees
drive company cars. Of these, half receive free fuel for private use.
Successive governments have increased taxation on cars and fuel. Both
employers and employees now need to consider the tax implications of company
cars before making decisions.
Since
April 2002, the system has been reformed to encourage companies to run
‘greener’ cars. A car’s CO2 emission levels now determine the tax paid
for both new and existing vehicles, though older vehicles (registered
before 1998) are still taxed on engine size.
This
briefing covers:
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