Tax Rates

Company Tax

The government has announced that the planned increase in the small companies rate of Corporation Tax from 21% to 22% will now not take place.

The small companies rate will remain at 21% until March 2011.

Benefit in kind tax charge on private fuel for company cars

The benefit in kind charge where private fuel is provided for company cars is calculated by applying the same % as is used to work out the car benefit to a fixed value which changes each year, known as the multiplier.

For example, if the rate for the car, which is calculated from its CO2 emissions, is 25% then the cost for the private fuel is calculated by taking the same 25% of the multiplier.

For the tax year 2010/11 the multiplier increases form GBP 16900 to GBP 18000

If we take a car with a list price when new of GBP 30000 and emissions which give a charge of 25%, then the amount added to the employed persons income for tax purposes will be: -

25% of the list price of the car (25% of GBP 30000) that is GBP7500

Plus

25% of the private fuel multiplier (25% of GBP 18000) that is GBP 4500

So the total amount is GBP 12000.

The company must also pay social costs on the GBP 12000.