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Twin carbon letter

You stated that the cost of a new hybrid, such as a Toyota Prius, could be offset against tax. I am considering ordering a new Mk3 Prius as soon as they become available next month and would dearly like a definitive statement on the tax position. Could you perhaps clarify this – either by replying to this or in your column in the near future.

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Basically if a car emits 110g/km CO2 or less any company that buys it can offset 100% of the cost against one year’s turnover for tax
purposes. If you have the car as your company car you then have to pay BIK tax on it based on CO2 and list price. Prior to 31-3-2008 the CO2 limit was 120g/km, and I took advantage of that a couple of weeks before the deadline. £9,500 less taxable income for my company, and I’ll pay about £450 in tax. Less than 100g/km puts a company driver in a very favourable tax position, and, of course, a hybrid is London Congestion Tax exempt.

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