Tax and the Company Car

Posted by Kath Docherty on August 10, 2017  /   Posted in Cars

One of the most frequently asked questions we receive is in relation to the use of cars for business purposes and how this will affect the tax liability.

Here, we will look at the various options available for business owners when it comes to work transport.

The current system of tax relief and benefits in kind are all linked to the CO2 emission of the car. There are a number of initiatives now underway to reduce emissions from vehicles. Thinktank Policy Exchange have reported that 70% of nitrogen dioxide emissions in London are caused by diesel cars and vans.

The tax system has long been used to incentive behaviour. With air pollution and congestion becoming key issues within London and other major cities, the government has put in place a system which encourages company car buyers towards efficient green vehicles.

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