Company car drivers One of the key factors is the amount of CO2 the car emits per kilometre driven – the higher the emissions, the higher the rate of Benefit-in-Kind (BiK) tax paid. For drivers of diesel cars there’s also a 4% supplementary charge based on the P11D value of the car.

What year is tax free on a car?

Tax exemption for classic cars is now rolling. This means that from 1 April each year, vehicles manufactured more than 40 years before 1 January of that year are automatically exempt from paying Vehicle Excise Duty (VED), otherwise known as road tax.

Is car tax based on emissions?

Vehicle tax rates are based either on engine size, or fuel type and carbon dioxide (CO2 emissions), depending on when the vehicle was first registered. For cars registered on or after 1 March 2001, the rates are split into bands – the lower the emissions, the lower the vehicle tax.

What is a good CO2 emission for a car?

In general, the lower this figure, the less fuel that a vehicle uses: a car with 90g/km CO2, should have good fuel economy. One with 180g/km CO2 or more will use a lot of fuel. So consumers looking to reduce their running costs ought to be looking out for cars with fewer emissions.

How is CO2 calculated on a company car?

The official CO2 figure for the car (measured in grams per kilometre) is converted into a percentage multiplier, then applied to the list price.This establishes the taxable benefit charge for the year. For more information, and to calculate how much tax you might be paying, check the GOV website.

Do you have to pay company car tax in the UK?

Because BiK rates are determined by CO2 emissions, plug-in hybrids (PHEVs) also have to pay company-car tax in the UK. However, how much they pay also depends on how far they can be driven with zero emissions.

How is company car tax calculated for passenger cars?

For passenger cars Company Car tax (or BIK tax) is calculated using the CO2 emissions figure each vehicle outputs. Your vehicles emission figure will fall into a BIK band which is associated with a percentage. This percentage is applied to the P11D value (list price) of your vehicle, giving you a maximum taxable amount.

Is there benefit in kind tax on company cars?

Benefit in kind tax on company cars is based on carbon dioxide emissions and the list price. Different rules apply according to the type of fuel used. Choose the car using the form below. Rates may go up or down over different tax years. What will the company car tax be on a…