Reporting company cars

Company directors who want to drive an electric or low emissions car are now seriously considering whether their company should buy the car, and claim the 100% capital allowance available for new cars with CO2 emissions not exceeding 50g/km.

As we explained on 28 November 2019 this first year allowance is only available until April 2021, so directors have to get a move on. The lower benefit in kind charge for all low emissions cars from April 2020 will also provide an incentive to “go green”.

Where a company car is made available to the director for the first time it must be reported on the form P46(car). Where the new car has zero emissions “fuel type A” should be chosen on the current version of that form, and on the P11D for 2019/20.

A new version of P46(car) will be released in April 2020 to allow you to report the zero-emissions mileage for hybrid cars which have CO2 emissions figures of up to 50g/km. This figure may be found on the certificate of conformity, but check whether it is expressed in miles or kilometres, and convert to miles if necessary.

Diesel cars which meet the Euro 6D standard and hence are exempt from the 4% diesel supplement for benefits in kind, are now available. It is important to distinguish between diesel cars which do meet the Euro 6D standard, and those that don’t, on the P11d form for 2019/20.

• Use fuel letter F for diesel cars that meet the Euro 6D standard
• Use fuel letter D for diesel cars that don’t meet the Euro 6D standard

 

If the car benefit has been payrolled there is no need to complete a P11D to report the car. However, for low emissions cars provided in 2020/21, the zero-emissions mileage figure will have to be provided in a new field on the first FPS submitted for the year.

 

Written by the Tax Advice Network