Employees and directors who are provided with a company car and who also receive free fuel from their employers are subject to the Fuel Benefit Charge. The multiplier used to calculate the cash equivalent of the benefit of free fuel provided to employees will increase from £18,800 to £20,200 for the tax year 2012-13. As a result of this change the fuel benefit charge will increase for fuel provided for all cars apart from zero emissions cars. In addition to announcing the Fuel Benefit Charge multiplier for 2012-13, the Government is also announcing the 2013-14 rate, whilst committing to announce all future rates a year in advance. The van Fuel Benefit Charge multiplier will be frozen at £550, and will increase by inflation in 2013-14. CIPP comment: The CIPP welcomes advance notice of the 2013-14 Fuel Benefit Charge multiplier. Legislation will be introduced to increase the appropriate percentage for company cars emitting more than 75g of carbon dioxide per kilometre by one percentage point to a maximum of 35 per cent in 2014-15. In both 2015-16 and 2016-17, the appropriate percentages of the list price subject to tax will increase by two percentage points, to a maximum of 37 per cent. From April 2016, the Government will remove the three percentage point diesel supplement so that diesel cars will be subject to the same level of tax as petrol cars. From April 2015, the five year exemption for zero carbon cars and the lower rate for ultra low emission cars will come to an end. CIPP comment: These reductions were expected reflecting the fact that new cars are becoming more efficient and so the average level of CO2 emissions is falling. Company Car Tax Rates 2014-15 to 2016-17
Corporation Tax Rates
Budget 2011 announced reductions to the Corporation tax rates. Budget 2012 revised these reductions, announcing that the main rate for the Financial Year beginning 1 April 2012 would drop by an extra 1% to 24 % and this is to be followed by two further annual 1% cuts to 22 per cent by the Financial Year beginning 1 April 2014. CIPP comment: The Chancellor’s announcement means that the UK rate will be dramatically lower than its competitors which will be welcomed by business.
Pensions
Automatic Review of State Pension Age (SPA)
The Government has announced an automatic review of SPA to ensure it keeps pace with increased longevity. Further details will be published in summer 2012.
CIPP Policy News Journal
09/10/2012, Page 105 of 234
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