Benefits around the use of company cars for employees and companies may need to be re-assessed as a result of the German car giant Volkswagen admitting it manipulated the results of diesel emissions tests.
This warning came from Stuart Haigh, director of Whitley Stimpson, the leading accountants in the M40 corridor, with offices in Bicester, Banbury and High Wycombe.
Company benefits are calculated on the list price of cars and the CO2 emissions of the car, with a 3 per cent supplement on diesel cars.
Stuart said: “This could mean that as far as VW cars are concerned this may increase pending any revised CO2 emissions figures as a result of the future investigations by the US and German authorities.
“I would like to warn both employees and employers with company cars in the area that the taxable value of the benefit as shown on the employee’s P11d may well be incorrect.”
Stuart said it was likely that company car benefits will need to be recalculated using the updated CO2 emission figures.
He said: “There may be other repercussions as it is not only employee benefits that may be affected. Tax deductions for businesses and companies for the costs of cars through capital allowances are also dependent on CO2 emissions.
“It is not clear at the moment how a change in the CO2 emissions of cars will be treated by the income tax authorities. The calculations are complicated and companies or individuals with VW company cars may want to take advice on any possible changes.”
Whitley Stimpson is a leading adviser on tax matters for businesses and Stuart Haigh can be contacted by telephoning 01869 252151 or by email at email@example.com