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.
If you’d like to know more about personal leasing options, please click here.
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.