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Budget Guide 2007

The CO2 emission scale charges which are used to calculate company car benefit charges have been increased for 2008/09. with the threshold for the minimum charge rate for calculating benefit-in-kind, on company cars, reduced from 140g per kilometre to 135g per kilometre. A new lower 10% band for company cars with CO2 of 120g per kilometre will also be introduced from the 1 April 2008.

Company Car Taxation
Amount Taxable % of list price
g/km 2007/08 2008/09 2009/10
135 15* 15* 15*
140 16* 16* 16*
145 15* 15* 15*
150 24* 24* 24*
155 27* 27* 27*
160 31* 31* 31*
165 32* 32* 32*
170 33** 33** 33**
175 34*** 34*** 34***

Emissions for vehicles are rounded down to nearest 5g/km.
Diesel supplements: * add 3% ** add 2% *** add 1%
Diesel supplement waived if Euro IV emission standard met and the vehicle is registered before 1 January 2006

Alternative Fuels 2007/08
Fuel Type Discount %
Electric 6
Hybrid petrol/electric (registered on or after 1/1/98) 3
LPG/CNG (gas only) (registered on or after 1/1/98) 2
Bi-fuel (type-approved) (registered on or after 1/1/00) 2
E85 Bio-ethanol fuel (applicable form 2008/09) 2
Cars without an approved CO2 figure
Engine Size Pre 1/1/98 car 1/1/98 or later car
1,400cc or less 15% 15%*
1,401 - 2,000cc 22% 25%*
Over 2,001cc 32% 35%

* 3% diesel surcharge applies

Company Car Private Fuel
The scale charge figure for private fuel provided for company cars remains at £14,400 for 2007/08. The benefit-in-kind charge is calculated by applying the percentage determined by the CO2 emission table opposite to £14,400.
Company Van Taxation

Benefit-in-kind charges where a van is used for private use (other than home to work travel).
Tax Year Scale Charge £
2007/08 £3,000*

* Further £500 charge if private fuel also provided.

VAT Fuel Scale Charge

Where employers provide free private fuel for an employee's company car, the employer is required to pay output VAT using the scale charges as set out below.

Rates applicable from 1 May 2007:
CO2 Band VAT on 12 month charge, £
140 or below 108.72
145 116.17
150 123.62
155 131.06
160 137.77
165 145.21
170 152.66
175 160.11
180 166.81
185 174.26
190 181.70
195 189.15
200 195.85
205 203.30
210 210.74
215 218.19
220 224.89
225 232.34
230 239.79
235 247.23
240 or above 253.94
Mileage Rates

An announcement was made stating that the Government will consider the case for changing the structure of AMAPs to align the tax/NICs treatment and to ensure that rates and thresholds are set at an appropriate level to promote environmentally friendly business travel.

Approved mileage rates for private cars (pence per mile)
Engine Size Up to 10,000 miles Excess over 10,000 miles
All cars 40p 25p
Company car fuel advisory rates (pence per mile)
Engine Size Petrol Diesel LPG
1,400cc or less 9p 9p 6p
1,401cc to 2,000cc 11p 9p 7p
Over 2,000cc 16p 12p 10p
Vehicle Excise Duty

With effect from 22 March 2007

Vehicles registered pre 1 March 2001:
Engine Size £
1,549cc or less 110
Over 1,549cc 175
Vehicles registered on or after 1 March 2001:
2007/08 2008/09
VED band CO2 emissions (g/km) Alternative Fuels £ Petrol & Diesel £ Alternative Fuels £ Petrol & Diesel £
A Up to 100 0 0 0 0
B 101-120 15 35 15 35
C 121-150 95 115 100 120
D 151-165 120 140 125 145
E 166-185 145 165 150 170
F 186-225 190 205 195 210
G* 226 and above 285 300 385 400

For new cars registered after 23 March 2006

Main Tax Rates and Allowances 2007/08
Income Tax Savings income – Dividends Savings income – Other Other income
On first £2,230 10% 10% 10%
£2,231 to £34,600 10% 20% 22%
Over £34,600 32.5% 40% 40%
From 6 April 2008, the basic rate of income tax will be reduced from 22% to 20% and the 10% starting rate will be removed for earned income but will continue to be available for savings income and capital gains
Main Personal Allowances 2007/08 £
Aged under 65 5,225
Aged 65 to 74 7,550
Aged 75 or over 7,690
Income limit for aged related allowances 20,900
National Insurance 2007/08
Class 1 (employment) earnings threshold £100 p/w
Employee's rate -
£100.01-£670 per week 11%
excess over £670 per week 1%
Employer's rate -
excess over £100 per week 12.8%
Corporate Tax 2007/08 % 2008/09 % 2009/10 %
Profits between £0 and £300,000 20% 21% 22%
Profits over £1,500,000 30% 28% 28%

A marginal relief fraction of 11/400 applies to taxable profits between £300,001 and £1,500,000.

The main rate of corporation tax will be set at 28 per cent for the financial year 2008-09. The small companies' rate will be set at 20 per cent for the financial year 2007-08; 21 percent in 2008-09; and 22 per cent in 2009-10.
Value Added Tax 2007/08 %
Standard rate 17.5