An important part of choosing the right company car is knowing how much it will cost you in Benefit in Kind tax.
A contract lease hire car is a cost effective route to driving a modern well-maintained vehicle and it makes financial sense to ensure your company lease car fulfils your needs while minimising your benefit in kind tax liability.
How to Calculate Your Company Car Benefit in Kind Tax Liability
Once you have established the list price of your lease hire car, select the appropriate percentage based on the CO2 emissions level of your vehicle, remember to adjust for diesel engines, then multiply the list price by the appropriate percentage to obtain your benefit in kind figure. Then reduce this by any contribution that you pay to your employer in respect of the car. You pay benefit in kind tax on the balance based on your marginal rate of income tax.
All Bussey Vehicle Leasing examples of benefit in kind tax exclude any personal contribution towards the vehicle.
List price of car (including VAT and accessories)
For the purposes of P11D the ‘list price of the car’ is not the purchase price of the vehicle but the total of:
- The UK list price of the car on the day before the date of first registration, including VAT, and delivery charges, plus
- The list price including VAT of any optional accessories with the car when it was first made available, plus
- The price including VAT of any accessories added to the car after it was first made available which had a list price of £100 or more.
For an exact quotation please contact us on 01603 253121 and we will be delighted to calculate this for you.