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15th Dec 2017 - We supply all makes and models of cars and light commercial vehicles. If cannot see your specific requirement please do not hesitate to get in contact

Taxation & Company Car Tax

It is fair to assume that whichever way you finance a company car, the taxation involved is critical in making the right decision. We often have cars on special offer that have a very attractive contract hire rentals but consideration has to be given to the company car tax charges that come with it. We have listed below the current rate of charges that relate to company car tax, because you are receiving a company car as a benefit from your employer.

What is company car tax, why do I pay it?

Company car taxation is tax which is payable because you are receiving the financial benefit of a vehicle from your employer. It is based on the C02 output and the P11d value of your car. The chart below indicates what percentage of the P11D price of the car you will pay in tax. People earning approximately £35,000 a year or less will have to pay 20% of this amount in tax, and people earning over £35000,00 pay 40%. If you earn over £150,000 each year you'll have to pay 50%. The tax is normally deducted each month from your salary. An example of this calculation is shown below.

  • Financial year 2013/2014
  • P11D = £25000.00
  • C02 = 155 = 23%
  • 23% of the P11D = £5750.00 taxable benefit

This amount £5750.00 is now taxed at the current rate of your income tax to calculate the tax payable.

Why are diesels so popular?

They produce less CO2, so the tax bill should be smaller. However they do carry 3% increase as they produce additional pollution compared to a petrol car. However, they are usually more expensive than an equivalent petrol version, you have to make sure the higher P11D price doesn't outweigh any advantage from a lower tax band. You also need to do your research on fuel costs, diesel costs more at the pumps than petrol and you need to meet the predicted fuel economy figures from the manufacturer to gain a real benefit.

Are you are still confused?

If this is still confusing contact the account management team at Astute motoring and we can tailor a specific quotation for you.

What should I look for to make the most of tax relief for the company?

Making sure the company is getting the most of the available tax allowances is somewhat easier. Both leasing and contract hire agreements for a vehicle below 160 GPKM CO2 output means that any rentals that are paid during the contract are 100% allowable against pre taxation profits. If the vehicle has a CO2 that exceeds 160GPKM you can only offset 85% of the rentals paid. These allowance rates are going to reduce in the future to match the commitment the UK has made to carbon reduction. Do not assume that getting the vehicle just under the 160 GPKM limit means you will be safe for the duration of the agreement.

However if you are considering alternative options to finance your car we strongly suggest that you contact the account management team as the recent changes in writing down allowances means that to claim to whole amount of tax allowances available may tax as much as 15 years.

Taxable Percentage of P11D

g/km CO22014/15 Petrol2014/15 Diesel2015/16 Patrol2015/16 Diesel2016/17 All2017/18 All2018/19 All2019/20 All
00058791316
1-505858791316
51-755891211131619
76-941114131615171922
95-991215141716182023
100-1041316151817192124
105-1091417161918202225
110-1141518172019212326
115-1191619182120222427
120-1241720192221232528
125-1291821202322242629
130-1341922212423252730
135-1392023222524262831
140-1442124232625272932
145-1492225242726283033
150-1542326252827293134
155-1592427262928303235
160-1642528273029313336
165-1692629283130323437
170-1742730293231333537
175-1792831303332343637
180-1842932313433353737
185-1893033323534363737
190-1943134333635373737
195-1993235343736373737
200-2043335353737373737
205-2093435363737373737
210-2143535373737373737
215-2193535373737373737
220 +3535373737373737

Co2 management and taxation

Co2 management and taxation is the number one concern facing motorists today. Fortunately the manufacturers are making considerable inroads to the carbon emissions that their cars produce, and along with the recommendations and advice that Astute Motoring Limited can offer we are confident you will have the best package for the duration of the lease.

The Motor manufacturers are investing massive amounts of money in Co2 reduction and eventually the eradication of the Co2 that current motoring produces. This technology is not only expensive at the current time but in reality it is not a reliable and workable alternative to our petrol and diesel reliance. Electric seems to be the focus at the moment but at astute we are convinced that the solution lies with Hydrogen, however the global economies and power of the oil companies may mean that it will be a few generations until we see this technology available on a mass scale.

So what do we do now?

Petrol, diesel and taxation of the vehicles that use this fuel is here to stay, so we need to manage this better than we might do already. Astute motoring will help you see what is your main concern, company or personal taxation, fuel management or consumption or a full carbon output management. We look at how you use the vehicles, do you require driver awareness, journey planning, maintenance reviews andc help you work to achieve your goals.

Do you want carbon neutrality?

Despite everything we do there will always be an amount of Co2 that we cannot reduce. Astute motoring have a unique system that will allow you to be able to offset this Co2 through a number of approved carbon reduction program. We will invest in carbon reduction initiatives all around the world that will save the equivalent Co2 that you cannot stop producing through your motoring activities in the UK. This is not the answer to the problem but we feel it offers the best balance at the moment. We do not offer the Co2 offset if there has not been a consultation to reduce the Co2 produced in the first instance, this is not a simple compensation scheme, to give peace of mind.

What do you do?

Nothing more difficult than send an email or give us a call (01253 888 833)

Notes:

Tax year 2015/16 (From 6 April 2015)

  • The appropriate percentage of list price subject to tax will increase by two percentage points for cars emitting more than 75 grams/kilometre of carbon dioxide, to a maximum of 37% in both 2015–16 and 2016–17.
  • The appropriate percentage of the list price subject to tax for the 0-50 g/km CO2 band will be 5%
  • The appropriate percentage of the list price subject to tax for the 51-75 g/km CO2 band will be 9%

Tax year 2016/17 (From 6 April 2016)

  • The Government will remove the three percentage point diesel supplement differential so that diesel cars will be subject to the same level of tax as petrol cars.
  • The appropriate percentage of list price subject to tax will increase by two percentage points for cars emitting more than 75 grams/kilometre of carbon dioxide, to a maximum of 37% in 2016–17.
  • The appropriate percentage of the list price subject to tax for the 0-50 g/km CO2 band will be 7% in 2016-17.
  • The appropriate percentage of the list price subject to tax for the 51-75 g/km CO2 band will be 11% in 2016-17.

Tax year 2017/18 (From 6 April 2017)

  • The appropriate percentage of list price subject to tax will increase by 2 percentage points for cars emitting more than 75g/km CO2 to a maximum of 37%.
  • There will be a 4 percentage point differential between the 0-50 and 51-75g/km CO2 bands and between the 51-75 and 76-94g/km CO2 bands.

Tax year 2018/19 (From 6 April 2018)

  • The appropriate percentage of list price subject to tax will increase by 2 percentage points for cars emitting more than 75g/km CO2 to a maximum of 37%.
  • In 2018/19 the differential between the 0-50 and 51-75g/km CO2 bands and between the 51-75 and 76-94g/km CO2 bands will reduce to 3 percentage points.

Tax year 2019/20 (From 6 April 2019)

  • The appropriate percentage of list price subject to company car tax will increase by 3 percentage points for cars emitting more than 75g/km CO2, to a maximum of 37%, in 2019-20. There will be a 3 percentage point differential between the 0-50 and 51-75g/km CO2 bands and between the 51-75 and 76-94g/km CO2 bands.
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