Company Cars
There are major changes to the taxation of company cars on the horizon. In essence, the taxable benefit in kind on those provided with a company car is to continue to be based on a percentage of its price when new, but with the percentage dictated by the car's theoretical carbon dioxide emissions setting a charge of between 15% and 35%.
The new rules will apply with effect from the 2002-03 tax year but the reason to give this matter attention now is that a company car selected currently and retained for 3 years will be well into the new regime. To illustrate the differences that arise a Rover 75 1.8 manual has CO2 emissions of 193 and is therefore taxable at 20%of list price whereas the automatic of the same model has emissions of 227 and an annual tax charge of 27% of list price. It is also worthy of note that annual business mileage will become irrelevant under the new rules.
The Vehicle and Fuel Testing Agency has made available a database website address http://www.vcacarfueldata.org.uk where details are displayed. In this way readers can see how they will be affected depending on their choice of vehicle.
We would be happy to provide assistance to those affected by an individual report using our Company Car Tax Program.
Dump Private Fuel?
The funding of private fuel costs by employers for employees/directors with company cars is increasingly become inefficient and costly in terms of tax. This is because the benefit in kind scale charge is now much higher than it was and is triggered by any private fuel whatsoever.
An employee may even now be potentially better off avoiding the scale charge by claiming petrol re-imbursement for business journeys only.
Computer Assisted Failure
In a recent survey it was estimated that many small businesses could collapse completely if they were to lose their computerised data.
One of the main causes is not viruses but human error - where data is accidentally deleted or saved incorrectly. This apparently accounts for 32% of data loss with 44% caused by crashes and 14% by software corruption.
Rigorous back-up and storage procedures are therefore extremely important.
If you would welcome a health check of your own data back-up processes or help in formulating disaster plan procedures then please contact us.
National Insurance Penalty
The Social Security Act 1998 provides for penalties to be imposed when employers, through negligence, submit end of year payroll returns containing errors or omissions. The impact of these penalties was deferred until April 2001 and extends to the failure to include employee's NI numbers!
If an employee cannot or will not provide the details of their National Insurance number these can be obtained from the local NICO office.
We are noting expanded interest in our payroll bureau service due to the ever increasing complexities in this area and are happy to assist and provide quotations where required.
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