Wednesday 21 March 2012
Matthew Hunnybun, Tax Partner at KPMG said:
“Within the fine detail of the Budget, further updates were announced to the longstanding benefit of company cars and private fuel provision. The main changes included:
- A further increase to the cost of providing private fuel from 6th April 2012, with the fuel benefit multiplier increasing from £18,800 to £20,200;
- The company car benefit will increase by a maximum of 1% for 2014-15 and 2% for 2015-16 where the employee remains in the same car;
- Withdrawing the 3% supplement for diesel company cars from April 2016; and,
- From April 2013, extending the 100% First Year Capital Allowance (“FYAs”) until 31st March 2015 for company cars with CO2 emissions less than 95g/km. This will no longer apply to company cars that are leased.
“With these changes, the Government continues to demonstrate that it seeks to encourage employers to provide cars that are carbon efficient or face higher tax and NIC charges.
“Company cars continue to be a key tool in rewarding, recruiting and retaining employees, with many employers now allowing employees to exchange salary for a company car and therefore these changes further highlight that reviewing your car fleet and car or travel policy regularly is cost effective for both the employee and employer.”
Follow us on twitter: @kpmg_uk_llp #budget2012
For further information please contact:
Judith Dow, KPMG Corporate Communications
Tel: 0207 694 8584 Mobile: 07786 197 718 Email: email@example.com
KPMG Press office
Tel: +44 (0) 207 694 8773
KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and operates from 22 offices across the UK with over 11,000 partners and staff. The UK firm recorded a turnover of £1.7 billion in the year ended September 2011. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. We operate in 152 countries and have 145,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. KPMG International provides no client services.