Company cars and fuel (Table C)

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.

Company vans

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.

Childcare

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.