Those of us in the market for a new company Ferrari or Bentley will be shocked and saddened to hear that from April 6th the current £80,000 maximum list price cap on vehicle tax will be removed. As a result of this the level of tax top executives pay on their company supercars could quadruple.

Many senior execs are cruising around in company-owned Ferraris, Bentleys, Aston Martins and Lamborghinis, and pay a maximum income tax of £14,000 and NICs of £3,584 pa under the current rules. They’re in for a shock. From April 6th a high-flier driving a Ferrari with a list price in excess of £220,000 will pay a total tax and NICs bill of almost £50,000, an increase of over 180%.

Second hand cars are no bargain either because HMRC charges car benefits on the list price; the price of a brand-new vehicle. Therefore, a five-year old Ferrari purchased for around £65,000 will have a tax bill based on its list price of £175,000 resulting in a total tax and NICs bill of around £40,000. This doesn’t seem like a very good deal to me.

Originally introduced by Alistair Darling in 2009 at the recession’s lowest ebb, increasing the tax rate on executives driving supercars is an easy target for the government. It’s hard to argue against a tax on a select group of wealthy individuals driving cars completely inaccessible to most but in reality it’s hard see how this can make much of a dent in the UK’s enormous national debt.

On the other hand, I think we’re likely to see fewer supercars on the roads over the coming years; that’s not necessarily a good thing either aesthetically or in terms of improving confidence in the economy.

ferrari, Tax, vehicle tax