The taxable benefit on most company cars will increase again for
2004/05, because the level of CO2 emissions at which the minimum
15% charge starts to increase drops to 145g/km from 155g/km. This
means that the charge for most cars will increase by 2% of the original
list price - unless they were already on or near the maximum (35%),
or are still below the minimum.
The same increase will apply to the benefit of free fuel for use
in a company car, because that is based on the same percentage applied
to a fixed figure of £14,400.
It has been confirmed that the base level of emissions will be lowered
to 140g/km for 2005/06, and this figure will be held for 2006/07.
Last year it was announced that the £500 flat rate taxable
benefit on the provision of a company van would be reviewed. From
6 April 2005, there will be no taxable benefit on the provision
of a company van where an employee is required to take the van accountants
at night, and any other private use is forbidden. Where private
use is allowed, the rate will remain at the current level until
5 April 2007; it will then increase to £3,000, and a new charge
of £500 will be introduced to cover the provision of fuel
for private use.
For some years, the provision of childcare by an employer through
a "workplace nursery" has been a tax-exempt benefit in
kind. Provision by other means has generally been taxable, although
vouchers are free of NIC. From April 2005, a new £50pw exemption
will apply to a wider range of "employer-contracted" childcare,
and existing "workplace nurseries" will remain exempt.
Although in many cases this is an attractive new exemption, it will
not always reduce the tax charge. Some existing exempt nurseries
will be subject to the new £50pw limit, which will increase
the tax charge; and vouchers of over £50pw will gain from
a tax exemption on £50, but lose by NIC being charged on the
excess over £50.
Paying childcare costs could be a tax break next year