HMRC Car and Car Fuel Benefit Calculator
Last week, HMRC announced that its car and fuel benefit calculator has been updated to include calculations for 2014 to 2015.
When a company car is made available for the private use of an employee a ‘benefit in kind’ value is calculated in relation to the car, and the fuel if that is also provided for private use.
- allows you to calculate the ‘benefit in kind’ value of a company car and, if appropriate the car fuel benefit
- provides an indication of the Income Tax you would be liable to pay for the provision of company car and car fuel benefit
The calculator allows calculations for the years 2009/10 up to 2014/15.
Information about forthcoming changes is available by following here.
To make a calculation, you need to go to: http://cccfcalculator.hmrc.gov.uk/ although it wasn’t working when I last tried it.
James Hay calls for flat rate of pension tax relief
A flat rate of pension tax relief would give most people a better incentive to save into pensions, according to Sipp provider James Hay, reported here.
The head of technical support at James Hay, Neil MacGillivray, said pensions were not as popular as ISAs with working age savers and cost the government, which only earns back £1 in every £3 in pensions’ tax relief.
Speaking at a masterclass at the New Model Adviser® conference, MacGillivray said it was time to look again at a recommendation made by Centre for Policy Studies author Michael Johnson in 2012, namely that pensions’ tax relief should not be given at individual’s marginal rate but on a flat rate basis.
‘If you are going to restrict tax relief you still need to incentivise people to save, if you won’t get tax relief at the higher rate then, as Michael Johnson suggest, there needs to be a flat rate at around 30% so it is cost neutral for the government.
‘For basic rate taxpayers it would be a real incentive to save. For a higher rate tax payer it would not be as good as incentive as it was, but still be better than an ISA.’
The New Model Advisers article says that the lifetime allowance for tax-relieved pension contributions was lowered from £1.8 million to £1.5 million in 2010 and will be cut to £1.25 million from April 2013. The annual allowance will also drop from £50,000 to £40,000. MacGillivray said further cuts to the annual allowance would make a lifetime allowance unnecessary.
He also called for a period of stability within pensions’ policy and to stop political meddling. ‘We should take the short-term politics out of pensions because politicians are elected for five-year periods and need to get elected,’ he said.