Company car tax rates

  • How company car tax works
  • The P11d value explained
  • What you'll pay
A company car can be much cheaper to run than a vehicle you own yourself, but you'll pay tax for the privilege.

How much you'll fork out depends on the value of the car, its carbon dioxide emissions and whether you are a lower or higher-rate tax payer.

You’ll be taxed on the car’s P11d value, which is the on-the-road price (including the cost of extras), less the cost of first registration and road tax.

You’ll then be taxed on a percentage of this figure – the more the car pollutes, the more you pay.

You then pay tax at your income tax rate. So, for example, if the car has a P11d value of £20,000, sits in the 25% tax band (see table), and you’re a higher rate tax payer, you'll pay: £20,000 x 0.25 x 0.40 = £2000.

You can find our online company car tax calculator here.
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