Company Car Tax
Benefit in kind tax
Benefit in kind tax, or company car tax as it is sometimes referred to, is designed to do two things.
Firstly, to reflect the benefit of having access to a vehicle for private use and secondly, to encourage drivers to choose more environmentally-friendly cars because the tax charged is directly related to the carbon dioxide level a car produces.
The Government has put green issues high on its agenda, so encouraging use of cars that reduce emissions helps meet its environmental targets. Basically, company car drivers pay tax on a percentage of the value of the car.
The value of the car is calculated as the new price published by the manufacturer, plus VAT, delivery, number plates and any optional extras. This is called the P11D value.
The driver is then liable to pay tax on a percentage of the P11D value decided by the carbon dioxide emissions of the car.
Company Car Tax Explained
For more information on company car tax, either click on the buttons below or read more in the company car tax articles posted below.