According to research, there is a struggle among the residents of the UK which has become very complicated for them to handle the burden of the company car tax. This is because of the fact that it tends to go above and over the budget limit of common people. People like the idea of buying a car and enjoying the discount on its cost but they want to ensure that it will bring in fortunes in the future as well in terms of company car tax. Only then this discount will be worth to opt. Moreover, the professional often suggests getting a new car on the lease rather than opting for buying the new car through their company. Buying through a company can end up paying high rates and huge amounts in company car tax.
However, there are possible ways to handle the burden of cost and company car tax and pay a hefty amount of money. This post is compiled with facts to look at about what ate the possible exemptions for company car tax in the UK, whether vans are exempted from the tax, how is it possible to reduce the company car tax, what is P11d, and how can you reduce its value. Let us get delved further into the discussion.
Talk to one of our intelligent and clever professionals to get your further queries about the company car tax in the UK. We will ensure to come up with the best possible solution.
What are the Company Car Tax Exemptions in the UK?
The exemptions of company car tax are implemented to the cars that are purchased through the company and you are paying tax over it. Yes, you heard it right, there are possible exemptions in this regard. However, you will have to meet certain criteria to be eligible for the exception. You will be expected to the following listed conditions of company car tax:
- You do not use the company car for private use.
- You have adapted the company car for the reasons of mobility.
- You are in the role of the proprietor of your own business.
- You are a partner of the limited liability partnership.
- You are in a position to be the partner in a partnership.
Moreover, if you are using the company car for the reason of business purely, you will not have to deal with the hefty amount of company car tax. This is more likely to be like leaving the car on your business premises overnight as well as over the weekends. The car will only be used when you have to meet a client for a business meeting or any other purpose of business travel. The training days are also part of this. According to HMRC commuting to work comes under the category of personal use.
What About the Business Vans – Are These Exempted From the Company Car Tax?
The rules of company car tax are equally similar for the case of business vans, however, a few more points of exemptions are added. When you are using the van as a pool van or for the journey of business, you will be exempted from tax liabilities. This point is different from the case of company cars. Business journeys are a way to travel to a temporary workplace or when you are traveling for business appointments. Some of the insignificant price journeys are also excepted from the company car tax. This includes a stayover to grab a coffee on a business trip or to have a look at the newspaper on the way.
What are the Possible Ways to Reduce My Company Car Tax?
You will have to qualify for the exception from company car tax. Many of you must be wondering about the facts about how can I reduce my tax bill for a company car. Getting a low-emission car is one of the popular ways to get an exception from this kind of tax. It is before any further changes occur in the process. There are some other options to reduce your tax bills if the first one does not work. Your company car tax will consider the tax bracket you fall in, the value of the car according to P11d, and what is the consumption of your business car. One of these is out of your control, however, the other two points can come into control. So you can ensure that you get a car that is low emission and is low at P11d value as well to get the exemption.
What is P11d and How Will I Reduce its Value?
The P11d value of a car refers to the cost of the number plate, delivery, VAT, and the price list of the manufacturer. The options of factories are also involved in this value. So in case you have a car that is high in P11d value, you will have to pay more company car tax. The simplest way to reduce the value of P11d is to buy a car that is less in cost. The lower you will be able to make the P11d value the better your tax bills will be. Some examples of low P11d value cars are shared by the experts as well. You can also take advice from a professional to reach a better profitable decision which will finally reduce your tax bills too.
The Bottom Line
Now that you have gathered a fair amount of information about the company car tax in the UK, we can bring the discussion towards wrapping up. The reduction of company car tax is beneficial since it will help to lower your overall tax amount and you will not have to deal with hefty amounts of tax bills.
If you seek professional help to learn more about the company car tax in the UK, why wander somewhere else when you have our young and clever team of professionals at CruseBurke?
Disclaimer: The information provided in this blog is about the company car tax in the UK, including the text and graphics, in general. It does not intend to disregard any of the professional advice.