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.
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Green edition: New emissions tests put C02 and NOx closer to real world driving
But the switch from NEDC to WLTP looks unlikely to have a major impact on BIK tax – at least in the short term.
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Fleets and vehicles: Minimise your company car tax liabilities
Claire Evans, head of fleet consultancy at Zenith, gives an insight into the choices fleet managers can make to reduce tax bills
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Tax impact of ECO, cash and salary sacrifice
Mark Morton, tax director at Ernst & Young, looks at the alternatives to the traditional company car
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Election 2010 - what they promised drivers
A guide to what the main political parties promised drivers and the transport industry in their 2010 election manifestos - and what was delivered.
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Top 10 diesels for low BIK tax
At the budget end of the market it makes little sense to choose diesel company cars unless they will be covering high annual mileage, and often petrol makes a more cost-effective
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Green vehicles: Lower CO2 not always the key to cutting costs
Comparisons show that depreciation has larger effect on costs than use.
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Legislation: Van fleet tax tips
HMRC clampdown on BIK tax paid by van drivers means more work for fleets.
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Company car tax bands
It has been since April 2002 that the company car tax has been based on a car's list price and CO2 emission figure.
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Company Car Tax: Company car tax explained
Fleet operators should now be used to CO2 emissions forming the basis of company car tax in the UK.
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P11D: a taxing issue?
The P11D value of a car will help shape an employee’s tax contributions and is an important consideration for fleets.
