In addition to the obvious costs such as vehicle depreciation, insurance, cost of finance etc, there are additional costs to be incurred in operating a fleet – and here by choosing vehicles with low emissions – such as the Vauxhall ecoFLEX range or the new electrically-driven Ampera E-REV – you can reduce your costs substantially.
Low emissions go hand-in-hand with low fuel consumption, but there are bigger savings to be enjoyed, as much of vehicle-related taxation is designed to encourage ‘cleaner’ vehicles.
Until March 2013, cars with emissions of 110g/km or less can benefit from 100% first year Writing Down Allowance (WDA) – allowing businesses that purchase their vehicles outright to write-off the whole of the capital cost of their investment against taxable profits for the period during which they make the investment. This means a helpful cash flow boost AND can help shorten the payback period.
Qualifying Vauxhalls for 2012/2013 tax year include:
Corsa 1.3CDTi 16v (75PS and 95PS) ecoFLEX Start/Stop models
Corsa 1.3CDTi 16v (75PS) ecoFLEX 3-door models
Ampera - both trim levels
For 2012/2013 tax year, for cars with emissions of between 111g/km and 160g/km (and that includes ALL our other ecoFLEX models – and indeed most Vauxhalls) the Writing Down Allowance is 18% per annum, while for cars with emissions of over 160g/km, a WDA rate of just 8% per annum applies. By choosing a model which benefits from 100% (first year) WDA your company could have a reduced Corporation Tax liability and improve cash flow. Go to the Toolbox to calculate the possible benefit of these models.
NICs are due on most taxable benefits – including car and fuel benefits – and are paid directly by the employer.
Like Benefit-in-Kind taxation, Class 1A NICs are based on the vehicle’s CO2 emissions, so the ‘greener’ the car, the lower the company’s tax bill. Indeed, they are calculated in the same way as Benefit-in-Kind, as shown below:
Example of NIC paid on car benefit:
Diesel powered car with OTR of £18,000 and emissions of 110g/km (2012/2013 tax year)
List price of vehicle for tax purposes (P11D value): £17,945
Car benefit charge (16%): £2,871.20
NI Contribution (13.8%): £396.22
Example of NIC paid on fuel benefit:
HMRC Fuel charge ‘flat rate’: £20,200.00
Car benefit charge (16%): £3,232.00
NI Contribution (13.8%): £446.02
Go to the Toolbox to calculate Class 1A National Insurance Contributions.
How much Vehicle Excise Duty (Road Fund Licence) is payable on a car now depends on its CO2 emissions – and once again, lower is better.
The 2012 Budget announced that from 1 April 2012, VED rates will increase in line with inflation and Heavy Goods Vehicle rates will be frozen.
Vehicle Excise Duty bands and rates for cars registered on or after March 2001 (graduated VED)
VED Band
CO2 emissions (g/km)
2012/20131 Standard Rate
2012/20131
First Year Rate
M
Over 255
£475
£1030
A
Up to 100
£0
£0
B
101-110
£20
£0
C
111-120
£30
£0
D
121-130
£100
£0
E
131-140
£120
£120
F
141-150
£135
£135
G
151-165
£170
£170
H
166-175
£195
£275
I
176-185
£215
£325
J
186-200
£250
£460
K
201-225
£270
£600
L
226-255
£460
£815
Images shown are for illustrative purposes only, and may show optional equipment.
* = Excludes fuel & lubricants; congestion charges; parking and speeding fines and the £250 insurance excess (if applicable).
1 = 2012/2013 rate is applicable until 31 March 2013.
