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Tax liability on a Company Car

A company car is viewed by the Inland Revenue as a Benefit In Kind. This means that drivers will have to pay tax on this Benefit. In order to determine how much tax they will need to pay, the price of the car they are hoping to obtain must be known. This price, known as the P11D value, includes the cost of optional extras but excludes Vehicle Excise Duty (the cost of the tax disc) and the statutory £55 Government first registration fee.

The chart below shows the Government CO2 emission thresholds for the 2008/9 tax year and beyond.

Step 1 : Check the vehicle's CO2 emissions against the chart to obtain the taxable percentage.

Step 2: Multiply the CO2 taxable percentage by the P11D price to provide the car's taxable value.

Step 3: Multiply the car's taxable value by your income tax rate – 20% for lower tax rate payers, and 40% for higher rate payers. This will provide you with the amount your drivers would pay in tax for their car.

N.B. This chart is an extract from the Government issued Benefit In Kind (BIK) charge for company cars, registered from 1 January 1998. Jaguar cannot be held responsible for the contents contained within.

Taking Cash instead of a Company Car

If the vehicle choice offered through your company car scheme is deemed too restrictive or the Company Car tax burden too onerous, your drivers may have the option to opt out and choose to finance their own car. The employer may also agree to offer a cash payment in lieu of providing a company car. Beware of the pitfalls though, as by choosing to fund their own car they will be taking responsibility for maintenance and servicing, plus the cost of insurance up to full business use standards. There are a number of finance packages available should you choose to fund your own company car. Jaguar Privilege offers a Personal Contract Purchase (PCP) scheme which enables you to pay for your car through monthly payments. For further information please contact us to obtain a quotation.

% of P11D Price to be taxed  CO2 (g/km) 2008/9  CO2 (g/km) 2009/10  CO2 (g/km) 20010/11 
 10* 120 120 120
 15* 135 135 130
 16* 140 140 135
 17* 145 145 140
 18* 150 150 145
 19* 155 155 150
 20* 160 160 155
 21* 165 165 160
 22* 170 170 165
 23* 175 175 170
 24* 180 180 175
 25* 185 185 180
 26* 190 190 185
 27* 195 195 190
 28* 200 200 195
 29* 205 205 200
 30* 210 210 205
 31* 215 215 210
 32* 220 220 215
 33** 225 225 220
 34*** 230 230 225
 35**** 235 235 230

 

*Add 3% for diesel.
 ** Add 2% for diesel.
 *** Add 1% for diesel
 **** Max charge, so no supplement

How do your drivers finally choose?

Once your drivers have calculated the taxable value on the car they are considering and have evaluated the various funding options available, inevitably they will need to test drive the car before making their final decision. To arrange a test drive please contact your nearest Jaguar dealer, alternatively contact us.

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