Company Car Tax Q&A

How much tax will I have to pay for my company car?

The amount of tax you will pay depends on a range of factors including:

  • The P11D value of the car you choose
  • The car’s fuel type and CO2 emissions
  • Your marginal rate of income tax
  • If you make any personal contributions towards the car and how much of the year you have access to it
  • Whether you have the option of taking a cash allowance and whether you are part of a traditional company car scheme or a salary sacrifice scheme

To find out more read our guide and if you are still unsure, you should seek professional tax advice or contact HMRC to discuss your specific situation.

Is a company car the right choice for me?

Once you’ve experienced the hassle-free nature of running a company car it’s very difficult to think about private ownership. Luckily, today there are personal leasing options that provide many of the benefits of a company car such as fixed price motoring and inclusive maintenance.

What car should I choose?

Only you can determine that but our guide to Choosing a New Car will help. This contains a handy checklist of the key areas to consider when making a selection.

To understand the tax implications of your choice, read our guide to company car tax.

I take a cash allowance from my employer and have taken a PCP through a local dealer. What tax will I pay?

From 6 April 2017 the rules changed for drivers who have the choice of a company car or a cash alternative. Drivers are now taxed either on the BiK value of their company car or on the value of their cash alternative, whichever is higher. Because you have taken the cash alternative rather than a company car, you will simply pay income tax on this allowance and not BiK tax.

How can I work out how much tax I will pay?

Read our guide here to help you calculate your company car tax. Bear in mind that if you take a salary sacrifice car or have the option of taking a cash alternative to a car, the tax rules are different, read more here.