Alison Clynes
Written by Alison Clynes
Wednesday, 11 November 2009 10:00

The rules on tax on company cars seem to change every time there is a budget. There are many reasons for these constant rule changes.

The cynical would claim that all changes to tax legislation are designed to increase government revenue. The government usually claims that they are simplifying matters, or have ecological concerns they wish to address.

Sometimes rule changes have to be made to close loopholes which have been exploited in the past. There are companies who specialise in trying to find ways to avoid tax and the government often finds it necessary to move the goalposts.

At various times the factors that affect the amount of tax and national insurance to be paid in respect of company cars have included annual mileage, the age of the car, its market value and its engine size.

There are also specific annual returns which have to be made in respect of company cars and other taxable benefits.

In short, the whole area is fraught with traps for the unwary. If an employer falls into one of the traps and innocently makes a mistake they can be asked, not only for tax underpaid, but also interest and penalties. In addition, HM Revenue and Customs will often use problems with a company's payroll as a launch pad for a full investigation of all aspects of a business and its directors' personal affairs.

We at Dataplan Payroll are a professional payroll company and we will take away these problems by supplying a payroll solution operated by payroll services specialists. You can leave it to us to worry about the rule changes.

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