Company car
- Cash equivalent: the benefit in kind for the year
- £10,200
- Appropriate percentage applied
- 30
- Income tax the driver pays on it for the year
- £4,080
Each figure on this page is HMRC's own method applied to the inputs you typed, with the rate and the page it was read from cited beside it and the date it was read. Carbikly publishes no dealer price, no lease quote and no advice on which car to take: the worked example is there to be overwritten with your own list price and band, and the rates are gov.uk's on the date cited.
A company car is a car the employer provides that the employee can use privately, and the moment it is available for private use it is a benefit in kind, whether or not the employee drives it home. HMRC values the benefit from the car's list price and its CO2 emissions rather than from what the employer paid or what the lease costs, taxes the employee on that value at their marginal rate through their tax code, and charges the employer Class 1A National Insurance on the same value. This page is written for the employee offered a car, the director considering one through their own company, and the fleet manager who has to report it: what makes a car a company car, how the benefit is valued, what the driver and the employer each pay, what private fuel adds, and where the free company car tax calculator on this site fits. It does not say which car to take.
Open the Company car tax calculator Free to use. No account, no card, no trial clock.
Establish that it is a benefit, and to whom
The car is a benefit in kind if it is available for private use, including the journey between home and work. A pool car that is kept at the workplace, used by several employees and not taken home is not, and a car that the employee is prohibited from using privately and in fact does not use privately is not. The benefit belongs to the employee or director the car is made available to, or to the employee where it is provided to a member of their family.
Value it from the list price and the CO2 band
Take the P11D value, the list price when first registered plus factory-fitted accessories, deduct a capital contribution up to £5,000, and multiply by the appropriate percentage for the CO2 band and fuel type, which runs from 4 percent for a fully electric car to 37 percent at the top, with a 4 point supplement for a diesel not certified to RDE2. Reduce it for periods of thirty or more days unavailable and for payments the driver makes for private use. The company car tax calculator on this site runs these steps.
Work what each side pays
The driver pays income tax on the cash equivalent at their marginal rate, collected through an adjusted tax code so it reaches the payslip monthly. The employer pays Class 1A National Insurance at 15 percent on the same figure, reported on the P11D(b) by 6 July and paid by 22 July. Private fuel paid by the employer adds a separate fuel benefit, worked from a fixed multiplier and the same percentage, unless the driver repays all private fuel by 6 July.
Keep the record the P11D is worked from
For each car: the P11D value, the CO2 figure and the electric range for a hybrid, the fuel type and RDE2 status, the dates it became and ceased to be available, the capital contribution, the private-use payments, the driver and their rate. The P11D is worked from those fields each April, and every one of them is a field HMRC can ask about.
What a fleet manager asks before trusting the Company car
Is a company car worth having? It depends on the car's percentage and the driver's rate: a fully electric or low-emission car at a low percentage is cheap to run through the benefit for a higher-rate driver, a high-emission car at 37 percent is expensive for anyone. The allowance worksheet on this site puts the car against the cash for your own figures.
Does the driver pay tax if they never use the car privately? If the car is available for private use the benefit arises whether or not private use happens. Only a genuine prohibition on private use that is actually observed, or a pool car kept at work, takes it out of the charge.
Who files the P11D? The employer, by 6 July after the tax year, with a copy to the employee and the Class 1A paid by 22 July. Carbikly Pro works the figures and keeps them; the filing is done by the employer's payroll or accountant.
Will it keep the fleet behind the Company car?
Describe the fleet, the drivers and how the cars are provided, and we will say plainly whether Carbikly Pro holds that today, when it will if it does not yet, or whether what you are describing is a payroll or a lease broker and belongs elsewhere. A person writes back.