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Company car taxation – what you need to know

Constant changes to company car tax mean that anyone with responsibility for fleets or in possession of a company or salary sacrifice arrangement car needs to keep up to speed with the latest tax rules, warns Nigel Morris, motor sector specialist tax director at MHA Macintyre Hudson

Company car tax was reformed in April 2002 to an emissions-based system. Since then the charge is calculated by applying a percentage figure (the appropriate percentage) to the list price of the car. The fuel type of the car and its CO2 emissions determine the appropriate percentage, with diesel cars attracting a 3% uplift on the benefit in kind (BIK) compared to a petrol car with the same CO2.

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