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Green car looks red

Lesley Fidler of Baker Tilly remarks on the tax changes to so-called 'green cars'.

She notes that while employer-provided vehciles provide a number of benefits in terms of tax breaks, the key to calculating its cost is in examining a car's CO2 emissions and its list price. Fidler argues that government attempts to 'push drivers towards greener cars' have created what she describes as a 'confusing set of rules'.

She gives the example of a man that chose a petrol engine company car this year with emissions of 120g/km with a list price of £12,000. At that time the benefit in kind was £1,200 per annum or £100 for each month for each month of the year. However due to changes introduced from this current tax year the benefit-in-kind has leaped from £100 a month to £150 a month.

As a result Fidler argues that such a man will be 'less keen to take advantage of any tax special offers in future' and maintains that there is 'no longer' any recognition of such a 'green choice' in terms of tax breaks.

Click here for further information on company car tax from this site, or you can see a breakdown of the 2012 Budget rules on Vehicle Excise Duty (VED) and company cars with a zero CO2 ratings (i.e. electric cars) at Green Car Guide.

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