For many years now HMRC have increased the tax costs for the company car driver and the employer. Not only by increasing the income tax implications but also by reducing the corporation tax allowances.
In the current tax year a company car driver will be taxed on 35% of the list price of the car plus additional accessories if the CO2 emissions are 220gm/per Km or over. Additionally if private fuel is provided the driver will be taxed at 35% of £20,200 in the current year. For example if a company car with a list price of £30,000 and private fuel is provided to an employee, they will be taxed on £17,570 of car and fuel benefits.
For corporation tax purposes the capital allowances available on a car with emissions over 160gm/Km will be 8% per annum.
making tax digital for income tax is coming - join us in stratford-upon-avon on 15th january 2026