- Take your car’s P11D value which is made up of the list price (inc VAT) plus any factory fit options and the delivery charge.
- Multiply the P11D value by the vehicle's company car tax rate from a sliding scale depending on the car’s official CO2 output to establish your Benefit in Kind amount (BIK) – please see below for the link to the car fuel and emissions data.
- Multiply that BIK amount by your personal tax rate (20%, 40% or 45% ) to get your company car tax payable.
Here’s a vehicle we have calculated for you:
- Taxable list price of the vehicle incl VAT is £26,550 x 0.21 (CO2 130 band) = £5575.00. Let’s assume your tax rate is 20%, £5575.00 x 0.20 = £1,150.10, £1,115.10 / 12 = £92.93. The Benefit in Kind is £92.93 per month.
For LCVs, the cost of tax is set at £3150.00 per annum. Car fuel and emissions data
When will you take the first payment?
Do I need to discuss this with my accountant?
You should always discuss your options for sourcing vehicles with your accountant as tax implications can be different for individuals.
For example, LTD companies, partnerships & sole trader businesses can lease a vehicle through their business; however, if you're a director of a limited company, you may prefer to lease a car personally depending on the prevailing company car tax rates. Sole traders and small partnerships do not pay company car tax. All business subscriptions exclude VAT.