Company Car Tax Calculator

What is Company Car Tax?

Company car tax is a tax that applies when an employer provides an employee with a car for personal use. This tax is based on the value of the car and any fuel provided by the company. It’s important to understand because it affects both employees and employers financially.

For employees, driving a company car means they receive a benefit in kind (BIK), which is considered additional income by HMRC. This extra income is taxable, so it’s important to know how much tax you’ll need to pay. For employers, providing a company car involves costs, including the tax contributions for the employee's benefit.

The amount of company car tax depends on factors like the car's value, its CO2 emissions, and the type of fuel it uses. Calculating your tax liability accurately helps you plan your finances better and avoid unexpected costs.

Using our Company Car Tax Calculator, you can quickly estimate how much tax you’ll owe for both vehicle and fuel benefits. This tool simplifies the process and gives you a clear picture of your financial responsibilities. Try it now to get an instant estimate of your company car tax.

How to Use Our Company Car Tax Calculator

Using our Company Car Tax Calculator is simple and quick. You only need to provide a few key details about your vehicle, and the calculator will do the rest.

1. Select the Make of Your Car: Start by choosing the make (brand) of your company car from the dropdown menu. This refers to the manufacturer, like Ford, BMW, or Tesla.
2. Choose the Model: Once you select the make, a list of models from that brand will appear. Pick the model that matches your company car. For example, if you chose Ford, you might select the Focus or Fiesta.
3. Pick the Fuel Type: Next, choose the type of fuel your car uses. The options include petrol, diesel, hybrid, or electric. The type of fuel affects the tax amount, so it’s important to choose the correct one.
4. Enter Your Capital Contribution (Optional): If you’ve made a one-off payment towards the car, you can enter that amount in this field. This contribution can reduce the taxable value of your vehicle.
5. Enter Payment for Private Use (Optional): If you pay your employer for using the car privately (not for work), enter the yearly amount here. This can lower your tax liability.

Once you’ve filled in all the details, the calculator will instantly provide a detailed breakdown of your company car tax, including:

1. Vehicle Benefit Tax:

• P11D Value: This is the car’s taxable value, taking into account its list price and any capital contributions.
• Percentage Charge: This figure is based on your car’s CO2 emissions and fuel type, determining the rate at which your car is taxed.
• Benefit in Kind (BIK): This is the value of the benefit you receive from having a company car, which is subject to tax.
• Tax Payable at Basic Rate: The amount of tax you’ll pay if you’re taxed at the basic rate (20%).
• Tax Payable at 40%: The amount of tax you’ll pay if you’re in the higher tax bracket (40%).

2. Fuel Benefit Tax:

• P11D Value: The taxable value of the fuel benefit if your employer covers your fuel costs.
• Percentage Charge: Similar to the vehicle benefit, this charge depends on your car’s CO2 emissions.
• Benefit in Kind (BIK): The taxable benefit of receiving free fuel for private use.
• Tax Payable at Basic Rate: The tax amount at the basic rate (20%).
• Tax Payable at 40%: The tax amount at the higher rate (40%).

Factors Affecting Company Car Tax

Several key factors influence how much company car tax you’ll need to pay.

1. CO2 Emissions: The amount of CO2 your car emits plays a major role in determining your company car tax. Cars with higher CO2 emissions usually attract higher taxes. This is because the government aims to encourage the use of more environmentally friendly vehicles. If your car emits less CO2, you’ll likely pay less in taxes. For those considering a new car, opting for a vehicle with lower emissions can lead to significant tax savings.

2. Fuel Type: The type of fuel your car uses also affects your tax. Petrol and diesel cars are taxed differently, with diesel cars often facing higher taxes due to their environmental impact. Hybrid and electric cars generally have lower taxes because they produce fewer emissions.

3. Vehicle Price (P11D Value): The P11D value is the car's list price, including VAT and any accessories, but excluding the first-year registration fee and road tax. A higher P11D value means a higher taxable benefit. This value is a critical part of the tax calculation, as it directly influences the amount of tax you’ll pay. If you're looking to minimize your tax, choosing a car with a lower P11D value can help.

Why Use Our Company Car BIK Calculator

Our Company Car Tax Calculator is an essential tool for anyone driving a company car in the UK. Here’s why you should use it:

1. Accurate and Up-to-Date Calculations

Our calculator is designed to give you precise results based on the latest UK tax rules. We update it regularly to reflect any changes in legislation, ensuring you always have the latest information at your fingertips.

2. Easy to Use

We’ve made our calculator straightforward and user-friendly. You only need to enter a few details about your car, and the tool quickly provides you with a detailed tax breakdown.

3. Comprehensive Results

Our calculator doesn’t just give you a single number; it provides a complete breakdown of your company car tax. You’ll see the vehicle benefit tax, fuel benefit tax, and the tax payable at both basic and higher rates. This detailed information helps you understand exactly where your money is going.

4. Saves Time

Instead of spending hours trying to figure out your company car tax manually, our calculator does the work for you in seconds. This means you can focus on more important tasks while still staying on top of your finances.

5. Helps You Make Informed Decisions

By giving you a clear picture of your company car tax, our calculator helps you make informed decisions about your vehicle choice and contributions. Whether you’re considering a new company car or evaluating your current one, our tool provides the insights you need to optimize your tax situation.

6. Free and Accessible

Our Company Car Tax Calculator is free to use and accessible anytime, anywhere. Whether you’re at work or on the go, you can easily access the tool from your computer or mobile device.

Calculate and Save on Your Company Car Tax Today

Using our Company Car Tax Calculator offers clear benefits. It provides an accurate estimate of how much tax you’ll need to pay on your company car and any fuel benefits. By understanding your tax obligations, you can plan your finances better, avoid unexpected costs, and even explore ways to reduce your tax bill.

Don’t wait until tax season catches you off guard. Use our Company Car Tax Calculator now to get a clear picture of your tax responsibilities. For personalised advice or help with more complex tax matters, consult our accountants.

Frequently Asked Questions on Company Car Calculator

How is the P11D Value Calculated?

The P11D value is the taxable value of your company car. It's based on the car’s list price (including VAT and delivery charges) when it was new, even if you’re using a used car. If you make a capital contribution towards the car, this amount reduces the P11D value. This value is then used to calculate how much tax you owe on the car.

How is the Benefit in Kind (BIK) percentage determined?

The Benefit in Kind (BIK) percentage is determined by your car’s CO2 emissions and fuel type. Cars that produce more CO2 generally have higher BIK percentages, meaning you’ll pay more tax.

Can I reduce my company car tax liability?

Yes, there are a few ways to reduce your company car tax liability. Choosing a car with lower CO2 emissions or opting for an electric or hybrid vehicle can significantly reduce the amount of tax you pay. Additionally, making a capital contribution towards the purchase of the car or paying for private use can also lower your taxable benefit.

What happens if I change my company car mid-year?

If you change your company car mid-year, your tax liability will be adjusted based on the number of days you had each car. HMRC will calculate the taxable benefit for each car separately, considering the P11D value and BIK percentage for each. This ensures you only pay tax on the benefit received for the time you had each vehicle.