Budget 2004

The 2004 Budget and what it means to company car drivers.

The budget kept the existing company car taxation regime in place. The impact of the CO2 based mechanism is to be reviewed, but the current legislation and rate structure is appropriate for the moment.

Income tax - Company cars

The CO2 based system is to continue. Tightening will continue to 2005/6 but then rates will remain the same for the following year of 2006/7.

Many drivers will see car tax jump up by between 7 and 13% as the CO2 bandings reduce each tax year. Use the tax calculator to see the precise figures for current cars up to 2006/7.

Income tax - Fuel scale benefit charges

Following the Chancellor's announcements in 2002, the calculation is based on the same method as car tax, using the identical percentage derived from the CO2 emissions. This percentage is to be applied to an annual fuel list price equivalent of £14,400 for all cars and fuel types. See the fuel benefit calculator for a table and check to see if it is worthwhile. The Chancellor has announced that £14,400 will also be the figure to be used for the 2004/5 tax year. For most cars, this means that the tax charge will rise 7 to 13% because of the tightening CO2 percentages. Look at the tax calculator to see the relevant figures for new cars.

Intranet information

If you would like to link to your own corporate version of Comcar, then please contact us. An intranet version can be customised to fit in with your company's policies, and extraneous links will be removed.

Anything an employer can do to help driver's find the least taxed car for their needs will benefit all concerned (apart from the tax collector, but even he will be comforted to know that the UK's innovative "polluter pays" car tax regime is having an impact).