Podcast
Questions and Answers
What is the basis for calculating the 'assessed benefit in kind value' for Employer-paid National Insurance contributions?
What is the basis for calculating the 'assessed benefit in kind value' for Employer-paid National Insurance contributions?
What is the purpose of the P11D list price?
What is the purpose of the P11D list price?
How are employee-paid BIK tax rates calculated?
How are employee-paid BIK tax rates calculated?
What is included in the P11D list price?
What is included in the P11D list price?
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How is the taxable benefit of a company car added to the employee's income?
How is the taxable benefit of a company car added to the employee's income?
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What is the effect of CO2 emissions on company car taxation?
What is the effect of CO2 emissions on company car taxation?
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What is the purpose of the CO2 emissions table?
What is the purpose of the CO2 emissions table?
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What is included in the calculation of the car's P11D price?
What is included in the calculation of the car's P11D price?
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Study Notes
Company Car Taxes - Benefit In Kind Tax
- A company car is a car provided for an employee's private and business use, excluding those provided to sole traders or partners.
- Company car taxes have income tax, VAT, and national insurance (NI) consequences.
- Taxes and duties are based on CO2 emissions, affecting both employees and employers.
Benefit In Kind Tax
- Employee-paid BIK tax rates depend on the car's P11D price, fuel type, and CO2 emissions.
- P11D price is the list price of the car, excluding Road Fund Licence and First Year Registration Fee, but including delivery charges.
- Extras fitted to the car (costing over £100) are included in the P11D price.
- Drivers of company cars are taxed as if they have received a monetary amount equivalent to the car's value.
Tax Rates
- CO2 emissions (g/km) and electric range (miles) determine the tax rate percentage.
- Tax rates for 2022-23 to 2027-28 are:
- 0 CO2 emissions: 2% to 5%
- 1-50 CO2 emissions:
- >130 electric range: 2% to 5%
- 70-129 electric range: 5% to 8%
- 40-69 electric range: 8% to 11%
- 30-39 electric range: 12% to 15%
Employer-Paid National Insurance Contributions
- Employer-paid NICs are based on the car's assessed benefit in kind value, which is also based on CO2 emissions.
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Description
Learn about the income tax, VAT, and national insurance consequences of company cars, including private fuel and capital allowances based on CO2 emissions.
