Company Cars - How do we know the tax cost?

If a Company provides a car for the private use of an employee a “benefit in kind” needs to be calculated on which both the individual and the Company will pay tax or National Insurance. Companies pay class 1a at 13.80% on the calculated benefit, employees will pay tax dependent on their additional income (20% or 40%)

If you are trying to decide which type of car to purchase HMRC has a calculator which will help estimate the benefit on a particular vehicle, the link can be found here


Alternatively try our own web site calculator - just click on this link and answer the questions


The calculator takes into account the following criteria

-          list price

-          availability of the car

-          private contributions made by the employee

-          CO2 emmissions

-          If the employer is paying for private fuel

For further details or any queries contact us at OBC



 Eve Wickenden FCA BSc (Hons)


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