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Tax Update – Vehicle fringe benefit value

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Just received notification that the fringe benefit tax on company vehicles will be increased from 1 March 2011, to 3.5% of the value of the vehicle, which includes VAT.

Where the cost includes an element for maintenance plans, the tax rate is 3.25%.

When calculating PAYE, 80% of the fringe benefit must be included in the employee’s remuneration.

This percentage is reduced to 20% if the employer is satisfied that at least 80% of the use of the motor vehicle for the tax year ...

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