Individuals who have the use of a car supplied by their employer for both business and private purposes must pay an increased amount of tax. The rules are complex and the amount of ‘benefit’ the car represents has depended on the tax year, age of vehicle, miles covered, value of car and now the carbon dioxide emissions per kilometre.
However in tax year 02/03, mileage has been removed from the equation, and for cars registered after January 1998 (from when emissions figures became available), the benefit is based on a percentage of the car’s (and its accessories) new price only. All cars are subject to a tax burden minimum of 15 percent and a maximum of 35 percent of the new price. The actual percentage is calculated from the car’s Carbon Dioxide emissions per kilometre.
For Inland Revenue guide see https://www.gov.uk/tax-company-benefits/tax-on-company-cars
A car that was first registered more than 15 years before the end of the tax year is specified as a benefit of 32% of its ‘fair market value’. This may be taken as a professional valuation, the price paid recently or some other reasonable estimate of its value.
KWE cars and their modern equivalents (Mercedes S class, BMW 7 Series, Lexus etc) are all large-engined, high emissions cars, usually attracting the maximum burden of 35% of their new price. As an example, a BMW 3.5 litre 7 Series with average options has a new price of around £60,000. It has CO2 emissions of 298g/km and thus hits the maximum 35% loading (anything above 265g/km is 35%). The taxable benefit is thus £21,000. It is likely that our customers will be paying tax at 40%, so the annual personal cost of running such a company car is £8,400.
By comparison, the equivalent KWE K1 has a new price of £27,000 and its tax burden will be 32% or £8,000. The personal tax cost at 40% would be £3,200.
It’s clear that there are strong financial reasons for running classic cars as company cars—provided that they are at least as reliable, handle as well and are as well supported as new cars. This is what KWE offers.