Since April 2002, Company Car ‘Benefit in Kind’ tax has been calculated using:

1. The List price of the car + extras – the total of which is called the ‘P11d value’, and
2. The CO2 emissions of the car

Company Van ‘Benefit in Kind’ is currently based on a flat taxable charge of £3,000.00 per year

You can calculate your actual tax liability by using the following link to the Inland Revenue website page, which enables you to input the relevant facts for the car you intend to acquire and any financial contributions you may be making:

http://cccfcalculator.inlandrevenue.gov.uk/CCFO.aspx

Briefly, the calculation is as follows:

For both cars and vans, the resultant taxable charge is then multiplied by the rate of income tax that you pay – normally either 22% or 40%. The result is the amount of tax you will pay in a full tax year

e.g. List price of car + extras (P11d value) = £22,675.00

The CO2 emissions of the car is 160 – this is currently rated by the Inland Revenue at 19%

The P11d value £22,675.00 is multiplied by 19% = £4,251.25

This figure - £4,251.25 – is then multiplied by your own personal tax charge – say 40%, so:

£4,251.25 x 40% = £1,700.50 and this is the amount of tax that you will effectively pay in a full tax year = £141.71 per month.

For any van, the flat charge of £3,000.00 is simply multiplied by your own personal tax rate, therefore:

• 22% tax payer will pay 22% of £3,000.00 = £660.00 in a full year or £55.00 per month
• 40% tax payer will pay 40% of £3,000.00 = £1,200.00 in a full year or £100.00 per month