A company car is part
of many employers' benefits package and will often be a more
efficient way of owning and running your own vehicle, however the
government won't let you get away without paying tax for the
privilege! In the same way as it's becoming cheaper to run a greener
car from a road tax perspective, the same can be said about company
car tax, so our guide of the lower emission cars in bands A-D gives
you a great starting point.
To calculate the
amount of tax you'll be liable for there are a number of
considerations:
-
The rate of tax you currently pay (i.e. higher/lower rate)
-
The value of the car based on its P11d (OTR price less registration
costs & road tax)
-
The car's CO2 emissions
-
Fuel type
The calculation is
as follows: using the table below, you'll find a percentage figure.
Multiply this by the P11d value and your tax rate and you'll find
your tax cost. For instance (2011/12 tax year):
Petrol car with emissions
of 125 CO2 g/km:
15%
Higher rate tax
payer: 40%
P11d value £10,000
Tax Cost
£600
Simple? Maybe not! The HMRC have a
calculator on their website -
click here to go straight to the right
page
Company Car Tax -
Budget 2011
The chancellor
announced a number of changes & simplifications in his budget
speech. For full details
click here.