Company Car Drivers Hit in 2009 Budget

Changes announced in the 2009 Budget on the banding of company car tax could mean a cost of up to £85 million a year for company car drivers.

This change has been justified under the 'Green banner' irrelevant of the increase in revenue - The Chancellor announced the changes are designed to encourage drivers to transfer to lower emitting cars, however this move has been decribed as a 'stealth tax' on company drivers

Changes will take place from 6 April 2011 and will include:

A 5g/km of CO2 reduction of the basic threshold of 15% band of company car tax - so this band will apply to cars emitting between 121 and 129g/km

An increase in tax bills for those company car drivers that drive cars producing more than 129g/km - increases will be start with 1% for every 5g per km increase in CO2 emissions, to a mximum of 35%

The abolishment of discounts that are currently available on early uptake Euro 4-standard diesel cars, higher-emitting hybrid cars and alternative fuel company cars

The continuation of hybrid cars emitting 120g/km or less to fall within the 10% band and electric cars will continue to be subject to the 9% band, which is the lowest for any type of company car.

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