Which company cars will be cheapest in 2010?

01/12/2009   -   A company car which an employee uses for private purposes constitutes a taxable benefit in kind. This benefit is liable to tax. As of 1 January 2010, the taxable benefit will no longer be dependent on the taxable horsepower, but on the CO2 emission level and the CO2 coefficient. Is this good news or bad news for employees?

How company cars will be taxed in 2010

The taxable benefit is equal to the fixed private mileage (5,000 or 7,500 km, depending on the home/workplace distance), multiplied by the CO2 emission level of the vehicle and the CO2 coefficient.

The coefficients are indexed annually on 1 January.

Which company car will give you the best cash benefit?

SD Worx calculated the taxable benefit of a number of popular company cars and the difference between the new CO2 formula and the earlier formula based on taxable horsepower. The table shows that of the six cars, the BMW 3 Touring 318D yields the greatest cash benefit according to the CO2 formula. The Ford S-Max 1.8 tdci and the Golf Plus 1.4tsi petrol cost the employee extra salary, which amounts to a lower net salary.

What is remarkable is that under the new CO2 arrangement employees will have to pay more for popular multi-purpose vehicles (MPV) such as VW Sharan, Ford Galaxy, Renault Espace or Opel Zafira.
The standard models of these cars have a low HP but a high CO2 emission level. This made them ‘cheaper’ in the old system than in the new system. Employees will in principle get a better deal with a less polluting eco version of those same MPVs.

In association with SDWORX