Tax Credits and company cars

Acc72

Hello All,


I have used the benefit calculator on this site to work out any CTC and WTC, however there is not an option to include a company car benefit (this is the use of an actual car and not a car allowance).


How is this included in benefit calculations ? - is there a standard value that is added to the base salary ?

NYM

The 'value' of the benefit should be in box 9 of your P11D

no1bert

hi, I wonder if someone can help, good ole Mr Taxman seems to be stinging me yet again with a 'K' code and my company doesn't seem to want to help me either !


I received the usual letter from taxman for 2015/2016 tax year saying that I had to pay £5117 for my car benefit, and £5083 for fuel on top of that a further £2673 for under payment for 2014/2015 tax yr, (didn't register for company car from Feb 2014 to july 2014) for this I have been told my tax code is now K226.


now here's the weird part, I have been on the HMRC site and it says @ max I should be paying for car (ford Cmax worth 22250 co2 emissions 129) @ 40% is £4k so how am I being made to pay £12873 ????


any advice appreciated, please

Acc72

Many thanks for the replies.


I was using the calculator on this site which did not appear to have a section for benefits.


If I earn £15,000 and my car benefit is £5,000 then do I simply just show my salary as being £20,000 ?


I guess that on the "official" forms this is broken down ?

dori2o

no1bert wrote: »

hi, I wonder if someone can help, good ole Mr Taxman seems to be stinging me yet again with a 'K' code and my company doesn't seem to want to help me either !


I received the usual letter from taxman for 2015/2016 tax year saying that I had to pay £5117 for my car benefit, and £5083 for fuel on top of that a further £2673 for under payment for 2014/2015 tax yr, (didn't register for company car from Feb 2014 to july 2014) for this I have been told my tax code is now K226.


now here's the weird part, I have been on the HMRC site and it says @ max I should be paying for car (ford Cmax worth 22250 co2 emissions 129) @ 40% is £4k so how am I being made to pay £12873 ????


any advice appreciated, please

Your not paying £12873 in tax, that is the value of the car and the private fuel being provided by your employer in cash terms.

The figures you have quoted suggest that the car you have is a deisel.

CO2 emissions of 129g/km on a deisel car invokes a %age charge of 23% (this is 20% for the 129 g/km CO2, plus the 3% surcharge because the car is a deisel) against the list price of the car. See https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/356654/TC2b.pdf this gives you the details of the company car charges.

So, List price of 22250 x 23% = £5117.50

The fuel is calculated again based on the CO2 emissions, charged against a fixed amount (Car Fuel benefit charge multilier) set by the Chancellor. For 15/16 this amount is £22100

Therefore 22100 x 23% = £5083

What this means that in terms of a cash value, the car and fuel is worth to you an amount of £12873. This is what you pay tax on at 40%

12873 x 40% = £5149.20

So the car, and the private fuel provided by your emloyer costs you £5149.20 per year in tax, or £429.10 a month for a fully serviced, fully insured, fully taxed, fully fueled car which you use for rivate and business use.

So as you can see the figures are correct. It is for you to decide whether or not it is beneficial to pay this for a company car and fuel, or whether you would be best taking a car allowance (assuming there is that option available).