Use our easy, step-by-step Car Tax Calculator to work out just how much tax you should be paying for your company car or on your cash allowance.
The Car Tax Calculator contains a listing of all current vehicles and is updated monthly. It excludes vans but an explanation of BIK on vans is included in this guide: Company Van Tax: It doesn’t have to be taxing
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All company car drivers pay tax on a percentage of the taxable value (P11D price) of their car. This percentage is based on: -
Benefit In Kind (BIK) - Company Car Tax is also referred to as Benefit-in-kind (BIK) taxation. BIK bands are set by Tax Year and can be viewed over four years which can help to predict future changes to your tax.
If you have the option to take either a company car or a cash allowance and the cash allowance is higher than the CO2 based car benefit, then you may be taxed on the cash allowance amount.
An additional taxable benefit arises if you receive free fuel for your company car for your private use. The fuel benefit charge is calculated in a similar manner to company car tax. A scale charge set by the Government (for 2018/19 this is £23,400) is multiplied by the same percentage for CO2 emissions used to calculate your company car taxable benefit.
The Private Fuel Benefit Calculator enables you to see the number of private miles you need to travel in order to break-even. You could be better off paying for your own fuel rather than taking 'free' fuel benefit and paying the tax.
A vehicle make refers to the name of the manufacturer of the
E.g. Ford, BMW
A vehicle model refers to a particular 'brand' of vehicle produced by a manufacturer. E.g. Ford Focus, BMW 3 Series.
A vehicle specification refers to the particular design specification of a brand of vehicle and includes information such as engine size and body shape.
Even if extras such as metallic paint are offered to you free of charge, you are still liable to the taxable benefit on these extras therefore the costs should be detailed here.
This is what it would cost you personally if you bought this same amount of fuel (based on the fuel price you enter onto this calculation).
The details that you enter on the car will pick up the manufacturer's average mpg* for CURRENT models. However you can also change the value to reflect your real world usage.
*The assumption is that the vehicle will achieve 85% of the manufacturers’ published average mpg for your car, unless you enter your own mpg figures where it will calculate based on 100%.
This is the amount of fuel you would purchase based on the number of private miles that you do and the average mpg for your car.
This will show you whether you are better (+) or worse off (-) by opting in to the private fuel benefit.
If you would spend less on providing your own fuel for private travel, including any recharging for plug in vehicles, then this benefit is not for you, even if your employer offers it.
This shows the break-even private miles you would need in order to make to make the Private Fuel Benefit a viable option in terms of costs, this is based on the number of private miles that you do and the average mpg figure.
If a company van is made available to you to use privately, then you are subject to income tax on this benefit-in-kind. The scale charge for the current tax year (2017/18) is £3,430, upon which you will pay tax at your marginal rate. The cost can be summarised as follows:
|Tax Rate||Annual Cost||Monthly Cost|
If fuel is provided for private use, there is an additional fuel benefit flat rate charge of £655, upon which you will also pay tax at your marginal rate.
|Tax Rate||Annual Cost||Monthly Cost|
From April 2020 WLTP will replace the current NEDC test procedure for establishing the official Fuel Consumption and CO2 emissions of new cars. For vehicles registered on or after 6 April 2020 benefit in kind will be based on WLTP CO2 value and any additional options added to the vehicle may change the CO2 emissions rating and impact the Benefit in Kind value. For vehicles registered on or before 5 April 2020 benefit in kind will be based on the NEDC correlated CO2 values.
What is Benefit in Kind?
Benefit in Kind (BIK) refers to any benefit which employees receive from their employment in addition to their basic salary. These benefits may include, but are not limited to, a company car or private medical insurance.
The value of the BIK is calculated in accordance with HMRC rules and income tax is payable on this value.
Will I pay tax on my company car?
Tax is payable on the BIK value of a company car if it is available for private use by an employee or their family or household. Private use includes any journeys between home and normal place of work.
What if I have a choice of a cash allowance or a company
If you have the choice of either a company car or a cash allowance, from 6th April 2017, and you choose to take the company car, your BIK will be calculated on the higher of:
You will continue to pay income tax on the CO2 based BIK if: