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The 2008 Pre Budget Review and what it means to company car drivers.


Here are some key extracts relating to company car drivers.

Income tax - Company cars

No direct changes announced here. However the 2.5% reduction in VAT will help manufacturers to reduce the official list price of cars and options on which this tax is partly based. This should equate to a 2% fall in company car tax on cars purchased after 1st December 2008 up to 31st December 2009. Other factors may quickly outweigh this price reduction, but anyone planning on acquiring a new company car in January 2010 should try and bring it forward to December 2009.

Income tax - Fuel scale benefit charges

No changes announced.

VED

Some of the big changes to VED on older cars announced at the last budget have been reined back. Road tax will still split into more bands in April 2009 but the increase will be limited to £5 even for over 225g/km cars registered before 23/03/06. The revised rates up to April 2011 are now on the Comcar database.

Fuel duty

Fuel duty will rise by 2ppl on 1st December 2008 and 1.84ppl on 1st April 2009. Fuel duty rates will then increase by 0.5 pence per litre above indexation on 01.04.10.

AMAPS

Still no change.This difficult area has been left alone at 40p for the first 10,000 miles and 25p thereafter.

Capital allowances

Further clarification was issued on the reform of tax relief for business expenditure on cars, and this will shortly be followed up the release of a technical note that should answer any remaining queries.