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30 September 2015

Those of you who read the news will be aware that Volkswagen have been fitting their vehicles with software which has been designed to manipulate the results of diesel emissions tests. Audi and Porsche have also been implicated in this. This could potentially have consequences for the calculation of any of these diesel company cars.

Company car and fuel benefits are calculated using the list price and approved CO2 emissions of the car. Pending the results of the enquiry by the German authorities, CO2 emissions data may well increase, which would lead to higher taxable benefits for employees.

In addition to the impact on Company Car and Fuel tax; this could have knock-on effects for capital allowance claims.

It would be a highly unusual move for HMRC to make any retrospective changes, particularly when employers and employees are not at fault, but as yet no official comment has been made by HMRC.