On the twelfth day of TAXmas, we advise to thee on company car benefits...
What could be a better present at Christmas than providing an employee with a “fully expensed” electric car just in time for the festive season. Faster from 0-60 mph than Santa’s sleigh, and with the added environmental upside, the tax system continues to encourage the take up of electric vehicles.
From a low tax rate (2% of the list price of the vehicle until 2025), no tax on free charging at home or at work, no extra benefit for either the provision of a charging point at home, or insurance provided on the vehicle, and no Vehicle Excise Duty to pay, the company provided electric car is the “must-have” present to wish for at this time of year.
Combined with the popular use of salary sacrifice, the range of current cars can be advantageous to both the higher rate taxpayer employee and the employer alike and are ideal if employers are thinking about what to include in their “secret Santa” arrangements.
Clearly, employers will want to avoid being on HMRC’s “naughty list” and should beware of the implications of the National Minimum Wage, due to increase to £11.44 per hour in April 2024. They also need to make sure that their employees are fully aware of the financial implications of salary sacrifice, as well as letting HMRC know that they have received a Company car.
And always remember to charge the car before setting off, or you might be in the same position as Santa in the following Christmas cracker joke:
What do you call Santa Claus when his sleigh doesn’t move?
If you need any help with employment tax matters, either for the Christmas past, present or the future, please get in touch with us at firstname.lastname@example.org.