Company cars: two turns of the screw

If you have a company car, the new tax year brought two pieces of bad news. Firstly, in most instances there was a 2% increase in the car benefit rate – the percentage applied to the car’s list price to calculate its taxable benefit. Because the 2% was almost universal, the highest proportionate tax increases were for the lowest emission vehicles. Secondly, if your company car is part of a salary sacrifice arrangement, then be warned that when you change cars (or April 2020 if earlier), you will be taxed on the salary foregone unless the taxable value of your car is higher.

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