1. What is the company car tax?
If your employer gives you a car to use for both business and private use, then you have to pay a tax based on the use of the car. If you earn more than £8,500 per year and have use of a car, then you have to pay the tax on it. There is also an additional tax if you get free or subsidized fuel for your private use of the car.
2. What is the Company Car Tax calculator?
The company car tax calculator helps you to calculate the benefit in kind value of the company car and the car fuel benefit. This calculator provides you with the amount of tax you are liable for as a result of using the car for your private use.
3. What is the tax on the company car based on?
The tax you pay on the company car depends on several factors. These include:
- The list price of the car and if it has any accessories
- The approved Co2 emission guides of the car
- The amount of fuel the car uses
- Whether or not you pay a lump sum for the car
- Whether you have to make any payments to the company for the private use of the car
- The part of the year that it was available for your private use
The normal rate of taxation is between 15% and 35% of the list price of the car. It will never exceed 35%.
4. If I only use the car for business, do I still have to pay the tax?If you only use the car for business purposes, you won’t have to pay any tax. This includes driving to meet clients. As long as you don’t use the company car for your own private use, you will not have to pay any tax.
5. How can I prove that I don’t use the company car for private use?
Your employer is the one that is responsible for the record keeping on the company car. However, you do have to keep accurate mileage records and you may have to sign an agreement that you will only use the car for company business. The use of the car map also be part of your contract of employment with the company and the type of use will be stipulated in the contract.
6. Are there special regulations for disabled employees with a company car?
Yes there are special regulations in place with respect to a disabled employee who needs to have a car with an automatic transmission. In this case, you would have to use the Co2 emissions charge that is closest to the manual equivalent. Some of the equipment used in the car may also be tax-deductible, such as that which is used solely by a disabled person or equipment included so that an employee with a disability badge can use the car.
7. What shouldn’t I include in the price of accessories?
When you are making up the price of accessories that are added to the company car, there are some things that are not to be included. These are:
- Accessories that were in the car when you received it
- A mobile telephone
- Accessories used by disabled employees
- Any privately owned accessories
- The cost of converting the car to LPG or CNG after you first registered it
- Any accessory that you need for business
- Accessories that are not attached to the car, such as floor mats
8. Can I claim a replacement car?If for some reason your normal company car was not available, you can claim the use of a replacement car. However, it only applies if you normal car was not available for a continuous period less than 30 days. You won’t have to pay tax on the replacement is if was a better car than the one you normally drive or if there was no arrangement to provide you with a better car.
9. What are advisory fuel rates?
Advisory fuel rates are designed to reflect the fuel rates at the time they were set. The intention is to save employers and employees time with having to figure out the average fuel costs they incur. These rates only apply when employers reimburse employees for the business travel in company cars or when they require employees to repay the fuel costs when they use the company car for private use.
10. Are there any tax free benefits associated with a company car?
The tax free benefits you enjoy when using a company car include:
- There is no tax on pool cars. This means that the car is only used occasionally by employees for business reasons and none of them take the car home with them at night.
- If an employee earns less than £8500 per year, there is no company car tax.
- Vans can be used for private use when the fuel costs do not exceed £500.
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