A company car, with or without fuel, used to be a popular perk. Most people need a car anyway, and many have to travel with their job. Over the years, however, the tax which has to be paid on this benefit in kind has gradually increased, to the point that it now probably exceeds the actual benefit.

One of the main bug-bears is that the benefit is calculated on the list price of the car, irrespective of the price actually paid. So, if you buy a car with a list price of £20,000 and pay £18,000 for it, after three years, when the car is probably worth £9,000 you will be paying tax on an annual benefit of up to £7,000, depending on the amount of Carbon Dioxide that the car produces . This will probably push you into negative (K prefix) tax code territory. The company also has to pay National Insurance Contributions on the benefit.

If you buy a car yourself, on the other hand, you can charge the company 40p per mile for the first 10,000 business miles, then 25p per mile for the remainder (from Apr 02).

If, however, you decide to have a company car, or already have one Independence includes facilities to record the car details and calculate the Income Tax and NIC charge. The NIC can be included in the amount paid over or paid separately. It also includes a 'What If' facility to show the chargeable benefit on different cars.

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