Calculate tax on employees' company cars
As an employer, if you provide company cars or fuel for your employees’ private use, you’ll need to work out the taxable value so you can report this to HM Revenue and Customs (HMRC).
‘Private use’ includes employees’ journeys between home and work, unless they’re travelling to a temporary place of work.
Find out about tax on company cars if you’re an employee.
This guide is also available in Welsh (Cymraeg).
Work out taxable value
You can calculate taxable value using commercial payroll software.
Or you can use HMRC’s company car and car fuel benefit calculator.
Using the HMRC calculator
Choose fuel type ‘F’ for diesel cars that meet the Euro 6d standard (also known as Real Driving Emissions 2). Choose type ‘D’ for other diesel cars.
Choose type ‘A’ for all other cars.
You can check a car’s CO2 emissions.
For electric cars and other cars with an approved CO2 emissions figure of 75g/km or less, answer ‘no’ to the question ‘is the car provided via an optional remuneration arrangement?’.
If your car has an approved CO2 emissions figure of 1 to 50g/km, you’ll also need to fill in the box for ‘zero emission mileage’ (also known as electric range). This is the distance the car can go on electric power before its batteries need recharging.
You can get your zero emission mileage figure from:
- your vehicle’s certificate of conformity, if you own the car
- the leasing company or fleet provider, if you lease the car
Work out the value manually
You can also work out the value manually on P11D working sheet 2.
Taxable value of cars
The taxable value of a car is not the same as its cost. The taxable value also depends on:
- the car’s fuel type and level of CO2 emissions
- the amount of time the car is unavailable during the tax year (for example, because of a mechanical fault)
How do you calculate sales tax on a car trade?
It may vary depending on which state you are in. Usually sales tax is the cost of the car minus the cost of the trade in, plus any dealer fees and aftermarket purchases (extended warranties, etc)
So it should be closer to $25,000.
More on reddit.comVehicle License Tax (VLT) Question
Confusion regarding company car tax rates
Hi, I’m sure someone will later be able to provide a better response but I am in a similar situation on 46k but in England. My company car tax is added on at the end of year earnings so is almost all on the higher tax therefore paying double, so a lesser salary would mean a larger amount of the company car tax being paid at the lower rate until it passes the higher rate threshold. Like me you could possibly look into salary sacrifice pension contributions to reduce your yearly earnings to then reduce the higher rate tax you will pay on the company car.
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