Income Tax,Company cars & BIK help me understand!

wassap

Hi everybody,

Im trying to understand how company car tax exactly works. Im currently a 20% tax payer on around 38k PA, im eligible for a company car with private fuel. but im trying to figure out if i would pay 20% tax on that or 40%.

Basically the car benefit is worth 6500 and the fuel benefit is worth 5106, does that mean that lot would be added to my salary, and what ever is over 43k, i would pay 40% tax? or is it not as simple as that.

Its all a bit new to me, and ive never really been the most tax savvy person out there, so any help and guidance appreciated.

Darksparkle

Depending on pension contributions, salary sacrifice etc your income would be considered as £49,606.

From April you'll pay:
0% on £0 to £11,000
20% on £11,001 to £43,000
40% on £43,001 to £49,606

This assumes your personal allowance is just the standard and you have no other taxable income or reliefs.

Your tax code should be changed from 1100L to K60 or something similar.

wassap

Thanks for that. thats how i understand it. I need to take a look at my pension payments and work out exactly what the costs are going to be.

Thanks

Bean_Counter

It might also be worth looking at whether it worth having private fuel, as unless your private miles are high, the tax charge might be more than the cost of the fuel.

redmalc

I used to get private fuel but given the cost in tax it was not worth it