How is company car tax paid

Did somebody say a brand new company car? Payday rolls round and you open your payslip. It's not from your salary bump. It must be the company car.

Did you think you could enjoy it with no strings attached? Of course you didn't. Good old HM Revenue and Customs was always going to make sure of that. HMRC is trying to create a level playing field, making sure that there are no loopholes for tax dodgers. Company cars are classed as a benefit in kind, a perk of the job outside of your ordinary salary.

Like your monthly pay packet, the taxman is going to claim a big chunk back. This is called benefit in kind tax. The amount of company car tax or benefit in kind tax you owe is fairly straightforward to calculate if you know what you're doing. We all want to make sure that we're not being shortchanged so it's good to know how these levels of tax are calculated.

In this article, we're going to lay out plain and simply how company car tax works. Keen to take advantage of low company car tax rates for electric cars?

Lease Fetcher is a car leasing comparison site, making your search for the perfect eco-friendly business car lease deal easy! See our roundup of and electric car lease deals. When you have a car that is for both private and business use, you need to pay company car tax on it. So, if you have a limited company car lease for more than business use, you pay tax. There are a few exceptions:. If your position in the company means that there is legally no difference between you and your business, then you pay no tax.

So, enjoy your self employed car lease tax-free! When you're given a company car that's for private use as well as for day-to-day business, you're expected to cough up for it. The tax you pay is calculated differently than your income tax and National Insurance contributions. To manually calculate how much tax you owe HMRC, you'll need to arm yourself with a few figures or you can cheat using the tax calculator for this tax year on Gov.

You'll need:. Towing with an electric car, hybrid or plug-in hybrid - what's the capacity and can you tow a caravan?

Electric car charging stations: a complete guide. Skip to header Skip to main content Skip to footer. Tips and advice Home Tips and advice. Best small company cars The flip side of the coin is that high earners driving an expensive car with a high CO2 emissions figure pay the most. How does company-car tax work? Tax on company provided fuel If you use company provided fuel for personal miles - which includes commuting - then the HMRC will tax you on that benefit too.

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Hide this message. Home Money and tax Income Tax. Your submission has been received! Something went wrong while submitting the form. The rate will apply regardless of the registration date of the vehicle.

Tax tables Cars registered before 6 April Are there other tax-related costs that I need to be aware of? Are there exemptions from tax on company cars? You are exempt from company car tax if: The vehicle is only used for business trips The vehicle has been adapted for an employee with a disability.

The vehicle should only be used for commuting to and from work and business purposes. It is a shared vehicle that's kept on site, and shared by employees for business purposes. Email Address Thank you!