Company car tax

Background

The company car taxation system is based on a percentage of the car’s price graduated according to its CO2 emissions. Members have advised the BVRLA that the car price which is used to calculate the company car tax is often misunderstood and the following advice can be used to help alleviate any confusion.

What car price can be used?

HM Revenue and Customs (HMRC) expect the list price to be used when an employee’s company car tax is being calculated. The list price is defined as the price published by the vehicle manufacturer, importer or distributor as the inclusive price for a single car of that type on an open market retail sale in the UK. The list price to be taken is that applying on the day immediately before the date of the car’s first registration.

Cars without an actual list price will be taxed on a notional list price basis.

What about accessories etc?

The following items are included in the list price:

• delivery charges
• VAT
• customs and import duties
• standard accessories fitted when the car was supplied
• optional accessories fitted after the car was first supplied and which cost over £100
• replacement accessories which are superior to the originals
• basic number plates

The following items are not included in the list price:

• running costs such as petrol, road tax, breakdown cover, etc
• warranties
• optional accessories costing less than £100 fitted after the car was supplied
• replacement accessories of the same standard as the originals
• accessories which have been replaced by accessories of a superior standard
• adaptations for the disabled
• any element of the list price or cost of accessories directly related to enabling the car to run on road fuel gases
• personalised number plates.
  

Further advice

HMRC provide the following additional advice on their website: Car price definition

For full details of the company car tax regime view our fact sheet: fact sheet 511 company car tax

In addition, the BVRLA provides advice on the company van tax regime and advice for those employees who frequently change their vehicles such as rental company employees. This advice can be accessed from the quick links on the right.

Bookmark with: