Company car tax explained, calculated and attempted to make simple.

When a company vehicle and company fuel is made available to an employee or director for private as well as, although not necessarily, business usage it is classed as an employment benefit and is therefore liable to income tax. The amount of income tax that the employee or director pays on the vehicle and fuel is based on a calculated figure known as the "benefit in kind" value. Simply the employer, or the company you work for has provided you with something which offers financial benefit, therefore it has a taxable value.

Benefit in kind is calculated using the vehicles P11D and C02 output. The P11D is the cost of the vehicle including all the manufacturer options and any other extra's so, as the vehicle cost increases so does the tax liability.  The C02 output of a vehicle is also a deciding factor in the eventual benefit in kind as the C02 increases so does the benefit in kind payable, so in short the more expensive and the more C02 output the more it will cost on payable tax. If you want to calculate your benefit in kind, click here to find the car you want, and see its current C02 output. There are tax liability illustrations attached to all the vehicles offered however, the chart for making these calculations is shown below. 

UK Carline has many industry associates helping us to keep our services up to date. One of these associates is Network Vehicles a susiduary of Lease plan , the worlds largest leasing company. There is a link below this paragraph which will take you to a benefit in kind calculator which is provided by Leaseplan. If you require any further information please do not hesitate to contact one of our account managers who will help with any specific benefit in kind enquiries.

There is a benefit in kind calculation shown next to every vehicle ( 9872 ) currently shown on this website . If you want to view these vehicles and the calculations click here. Stock display.

Click here to go to our benefit in kind Calculator.

The tax paid on company cars and fuel is subject to Budgetary changes and companies must be aware of annual variations in the calculations.

For more information on how Benefit In Kind can affect your employees or your choice of company cars, contact UK Carline today.

There are some supplements and reductions to take account of different fuels.

The rules governing the calculation of the appropriate percentage change in three ways with effect from 2008/09.

• The lower threshold, the CO2 emissions figure which determines the appropriate percentage for all cars, is reduced from 140 to 135.
• A new '10 percent band' is introduced for cars with a CO2 emissions figure of exactly 120 g/km or lower, the normal rounding does not apply to this figure. They are called 'qualifying low emissions cars' in the legislation, QUALECs for short. Diesel adjustments apply to QUALECs as to all others, but that is all; no other reduction which is available on other cars applies to QUALECs. As a result, the only acceptable figures for the appropriate percentage for QUALECs are 13 percent - cars to which the diesel supplement applies, and 10 percent - all other cars. So there is no misunderstanding, electric-only cars are excluded from these arrangements and retain their net appropriate percentage of 9 percent.
• There is a new 2 percent reduction for cars manufactured to be able to run on E85 fuel, a mixture of 85 percent bio-ethanol and 15 percent unleaded petrol. They will be known as type G on forms P46 (car) and P11D. Other cars cannot run on this mixture without damaging the engine.

C02 Calculator:

C02 emissions in grams per kilometre.

The exact CO2 figure is rounded down to the nearest 5 grams per kilometre (g/km), except for the 10% band applying from 2008/09 where the exact CO2 emissions figure must be 120 g/km or less to qualify.

1. Company car tax was reformed in April 2002 to an emissions-based system.  The charge is calculated by applying a percentage figure to the list price of the car. The fuel type of the car and its CO2 emissions determine the percentage figure.

2. The percentage figure ranges from 15 - 35% for petrol cars, rising in 1% steps for each 5 grams per kilometre (g/km) that the CO2 emissions exceed a lower threshold. 

3. From 6 April 2008, there is a new percentage charge of 10% for cars that have CO2 emissions of 120g/km or less.

4. There is a 3% supplement for most diesel-powered cars. A waiver of the 3% supplement applies to diesel cars that meet Euro IV emissions standards and were registered before 1 January 2006. All diesel-powered cars first registered from 1 January 2006 are subject to the 3% supplement from 6 April 2006.

5. There are discounts for more environmentally-friendly alternative fuels and different rules for older cars and cars with no approved CO2  emissions figure or recognised cylinder capacity, these do not apply to the 120g/km or under band. For more detail, contact us direct and one of our account managers will be able to help.