Company Car Tax Calculator

Benefit In Kind (BIK) is a government tax paid by employees who receive a benefit or perk in addition to their salary. These benefits include:

• Company cars and vans

• Private health insurance

• Non-business travel expenses

• Non-business entertainment

• Mobile phones used for personal use

• Any other asset provided by the company for personal use

Employees will pay tax on a percentage of the total value of each Benefit In Kind perk they receive

The amount of CO2 (Carbon Dioxide) that your vehicle produces will impact the amount of tax you pay. The fewer grams of CO2 your car produces for every kilometre you drive, the less company car tax you will have to pay. Electric vehicles have emissions of 0 g/km. As a result, they have a cheaper rate of tax.

The P11D is a document issued by HMRC that is used by companies to report any benefits being received by employees. This document contains all the information needed to calculate your P11D value. The P11D value of a vehicle is the manufactures list price, including VAT and delivery, minus the first year's Vehicle Excise Duty. This also includes the costs of any extras, such as metallic paint.

You might think that petrol and diesel cars are relatively similar. But, when it comes to car tax, they are very different. Diesel cars have an additional 4% tax because of their higher CO2 emissions.

Their high tax rate could soon make diesel company cars a thing of the past. However, diesel cars get more miles per gallon from their fuel. So, if you drive long distances, the benefit of fuel savings might outweigh the disadvantages of the additional 4% tax

Company car tax is significantly lower for electric and hybrid vehicles. In fact, for fully electric vehicles and plug-in hybrid electric vehicles (PHEVs), it is zero or close to zero per cent. Fully hybrid cars also have a much lower tax rate than petrol or diesel vehicles. However, it is not as low as PHEVs or all-electric vehicles as they are more reliant on fossil fuels.

These benefits make hybrid or electric vehicles a preferable choice for company car drivers. The downside of hybrid and electric cars is that they have a shorter driving range than their petrol or diesel equivalents. As a result, if you plan on driving long distances, a conventional car could be the best choice for you. Talk to the expert Car Leasing team to find the perfect type of company car for you.

Anyone benefitting from the use of a company vehicle outside of work will have to pay company car tax to HMRC. This is because your company car is considered a “benefit” or “perk” and is therefore treated as a Benefit In Kind or BIK. A Benefit in Kind is any benefit that an employee receives in addition to their salary.

You will pay your regular tax rate on a percentage of your vehicle's value. This percentage you have to pay is derived from the CO2 emissions of your vehicle. For help with working out your company car tax, use the handy Car Leasing company car tax calculator

Yes, the type of fuel that your vehicle uses impacts the percentage of company car tax you will pay. Your company car tax percentage is derived from the CO2 emissions associated with your vehicle.

Diesel cars have an additional 4% tax because of their higher CO2 emissions. As they have low or no emissions, electric, hybrid and PHEV cars have a much lower company car tax. To find the ideal electric or hybrid car for you, visit Car Leasing.

Benefit In Kind (BIK), is a tax paid to HMRC by employees receiving a benefit or perk in addition to their salary. These benefits include any asset provided by the company that has an element of personal use.

For company cars, the BIK rate is a percentage of your vehicle's value. This rate is dictated by your vehicle's CO2 emissions. If you need help working out your tax rate, use our handy company car tax calculator

A P11D is the document used by companies to report any extra benefits being received by their employees to HMRC. This includes vehicles and other benefits like phones and health insurance. This document contains all the information needed to calculate your P11D value.

The P11D value of a car is the manufacturer's list price, including any additional extras, minus the first year's Vehicle Excise Duty. If you have any more questions about your P11D, contact Car Leasing today

A company car is a great benefit or perk sometime offered to employees, but the amount of company car tax that may have to be paid may out way the benefits of having a company car in the first place. Because of this factor, it may be better to enter into a personal lease to avoid having to pay company car tax.

However, for some people, the concept of a company car is still appealing and there are ways to reduce the an=mount of company tax car to actually make it worthwhile retaining your company car. In this section we look at different ways to reduce the amount of tax on a company car that you need to pay.

There are a number of exemptions to company car tax if any of the following apply:

• The business is a partnership with one or more partners and you are one of the partners.

• Any partner in a limited liability partnership usually know as an LLP.

• You are a sole trader of the business.

• For mobility reasons, the car has been modified or adapted.

• The car is strictly not used for any personal use. The onerous is on the driver to prove this is the case by way of detailed records.

Options to reduce your company car tax:

The first obviously way to reduce your company car tax is look for a low CO2 emissions vehicle. Full electric are the lowest (Zero) working there way up to plug in hybrids, soft hybrids, petrol then diesel as a rule of thumb.

Looking at cars with low CO2 is just the starting point. You then need to be looking at the P11D value of the car. The P11D is based on the manufacturers list price, VAT delivery and any other any options added to the vehicle such as metallic paint.

At this stage you now need to refer to how company car tax is calculated and also use our enhanced online company car tax calculator, but in summary, to reduce your company car tax, you need to be looking at cars with the lowest emissions and the lowest P11D value.

Calculating your UK company car tax can be a complicated process. You will be taxed at your regular income tax rate on a specific percentage of your company car's P11D value. The P11D value of a car is the manufacturer's list price, including any additional extras, minus the first year's Vehicle Excise Duty.

The percentage of this value that you will pay tax on is derived from the amount of CO2 your car emits. For more information about company car tax, contact Car Leasing today.