Calculating Company Car Benefits

Company Car Benefits

There are significant changes to calculating company car benefits this tax year to be aware of, when reporting in P11D forms to HMRC. For both cars purchased and cars leased.

As an employer, if you provide company cars or have one yourself, you need to calculate the taxable value. Worth knowing these latest changes when planning future purchases and hires too. Our team of tax specialists is also here to help you with any of these latest changes.

Car list price when calculating a benefit:

  • Electric cars now have zero benefit.
  • How far the car can travel in pure electric mode plus level of emissions is calculated (cars under 50g/km CO2).
  • There are now different % rate tables to consult, for cars first registered up to April 2020 and after.

Cars purchased from April 2021 see changes in capital allowances businesses claim:

  • New electric cars – 100% of the cost is relieved in year one of purchase.
  • Cars over 50g/km or high emission cars only attract very slow relief.

Lease hire cars:

  • Leasing cost in accounts is allowable for tax – subject to 15% disallowance for high emission cars.
  • Leases after April 2021 will be affected by the disallowance.

HMRC has an online calculator you can use to calculate tax codes too and also a CO2 emissions calculator on their website.

Let’s Talk

If you need help with any of this, please contact our team of tax specialists on or by ringing 01267 237534.

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