Company Car Taxation – Reduction in car benefit charge for disabled drivers

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In response to a question posed by Kate Upcraft, HMRC provided further information about the changes that will be made to the rules for calculating the cash equivalent of automatic company cars provided for disabled drivers.

Disabled company car drivers with automatic cars are entitled, under current legislation, to use the CO2 emission rating of the equivalent manual car to calculate the car benefit charge. From April 2009, this provision is extended so that the list price of an equivalent manual car may also be used in the calculation where it is lower than that of the automatic car.

Details of the change are expected to be published at the time of Budget 2009, leading to the inclusion of the statutory provisions in the 2009 Finance Bill. The measure requires a change to the Income Tax (Earnings and Pensions) Act 2003.

Employers are not obliged to inform HMRC of those employees who will benefit from this change until the P11Ds for 2009/10 are filed early in the 2010/11 tax year. In order for the employees’ tax codes to be changed for the 2009/10 tax year, employees may contact HMRC direct (probably the quickest way of getting the tax code changed), or employers may submit a P46(Car) form (despite the change in the reporting rules for 2009/10).

This entry was posted on Monday, April 20th, 2009 at 05:00 and is filed under P45 / P46. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.