Frequently Asked Questions

  • With plug-in hybrids that get government grants, does a company car driver pay the tax on the whole car before the government subsidy is added?

    Yes. The government grant is based on the entire vehicle cost, not the discounted amount.

  • How is the taxable benefit calculated on a company car?

    Take the official on-the-road list price of the car including options, deduct the VED and First Registration Fee (£55) included, and multiply by the official CO2 percentage for that vehicle. This is determined by reference to the level of CO2 emitted in grammes per kilometre shown on the V5.

  • Why do you have Kombi vans listed as cars for company car tax purposes?

    Each vehicle is looked at on an individual basis. Generally though, if you think the vehicle you're interested in should be taxed as a van but is listed as a car, it's probably because it has more than 3 seats or looks like it has been made for the primary purpose of carrying passengers.

    If in your chosen vehicle there are comfy seats in the back and/or a window for passengers to look out of, the tax man will clasify the vehicle as a car for company car tax purposes.

  • Where can I find the list price of an old car?

    You can find the list price of an old car using our older car calculator underneath the new car selector here.

  • Which tax rate applies to me ?

    The value of the car benefit (BIK) is added to your earnings and will be taxed at the marginal rate. So those with a low salary will be taxed at 20% and higher earners will be taxed at 40%. If the BIK takes earnings over the 40% threshold, then part will be taxed at 20% and part at 40%.

  • I cannot find the car details that are needed to fill in a P46. It was first registered a few months/years ago. Where can I find the information?

    Go to the Company car tax calculator, and look for the module entitled Older Cars. This will help, but you will still need to know the full details of the car and date of registration. The original invoice and V5 will help you track it down, and guide you towards the original list price, cost of options and CO2 percentage.

  • Is company car tax reduced for older cars?

    No. The calculation is always based on the list price at the time of registration. Therefore discounts or the second-hand sale price are not taken into account.

  • Will I be taxed on a hire car?

    Yes. Any car provided by your employer and which is available for private use will give rise to a tax charge for the period of hire.

  • Do I have to pay company car tax on a van with 3 or more company logos on it?

    Yes, van tax must be paid if there is more than occasional private use.

  • If a car costs £90,000 or £260,000 and regardless of engine cc or CO2 emission levels, does it makes no difference to the tax a driver will pay?

    You were correct up until April 2011. It is the same for all cars costing £80k plus, since they are all in the 35% CO2 bracket. After April 2011 the cap was removed, and cars were then taxed on the full list price (less VED and First Registration fee).

  • For hybrid petrol/electric cars, are you sure you've got BIK % multiplier correct for 2008/9 & beyond? From 08/09, 120 g/km of CO2 will equate to a 10% BIK & so the 3% discount for these hybrids will make for a 7% BIK, not the 10% on your calculator?

    Our calculations are correct. The new 10% banding (and 13% for diesels) is a special case and does not follow the previous rules. For instance cars on 122g CO2 do not get rounded down to be included. There is no additional discount for hybrids, since this is a technology neutral measure to encourage the take up of low emission cars.

  • Does the tax on the BMW 1 Series 5dr 118d MSport really fall from 18% to 13% from 07/08 to 08/09? If so, why?

    The government introduced a special low tax banding for cars emitting up to 120g CO2/km to encourage their take up. Petrol cars also fall to 10%

  • Do Euro IV diesels pay less tax?

    Only Euro IV diesels registered prior to 1st January 2006 lost the extra 3% CO2 percentage that was applied to diesel cars. This discount no longer applies after April 2011.