Announcement made in this year's Budget
Drivers of company cars have been receiving an unwelcome letter in the post from Treasury outlining significant changes to the way benefit in kind charges are calculated.
They take effect today (6 April) meaning calculations for tax purposes will be based on the new list price of a car, not its current value, and the vehicle's CO2 emissions.
The changes being brought in are said to be in line with government's Climate Change Plan 2022 to 2027.
The emphasis on CO2 emissions is designed to encourage employers to consider lower emission vehicles.
In some cases, where employees are driving older, higher polluting vehicles the new methodology being applied by Treasury can mean a substantially greater tax burden running into thousands of pounds.
Treasury concedes that the changes brought in can result in the cash equivalent of the car and fuel benefit increasing significantly when compared with the current position.
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