Talking to your clients - Employer-provided car changes from April 2012

Tax is an ever changing world but some changes are more important to clients than others.

The date of April 2012 marks a number of such changes and it is an ideal time for you to talk to clients and help them to maximise their tax position.

Whilst you will be aware of the technical issues it is easy to forget, and find the time, to focus on explaining these to clients. Taking extracts from our Finance Act 2011 course notes, we have prepared a series of tax tips to assist you when 'Talking to your clients' to provide proactive, responsible and timely advice therefore saving you time.

From 6 April 2012 the CO2 emissions bands used to work out the taxable benefit for an employee who has the use of a company car will be shifted down by 5gm/km.

In addition, the current graduated table of company car tax bands will be extended down to a 10% band. This will mean that a 10% band will apply to company cars with CO2 emissions up to and including d99gm/km.

As a result 'qualifying low emissions cars' will no longer exist as a separate category.

To summarise, from 6 April 2012 the rules will be:

• no CO2 emissions - 0%;
• 75gm/km or less - 5%;
• 99gm/km or less - 10%;
• 100gm/km - 11%; and
• graduated increases of 1% per 5gm/km, as now, up to a maximum, including the diesel supplement, of 35%.

Key point

Make clients aware of the changes, so they know how much tax they will be paying on their company cars in 2012/13.