Car Tax

Boppy30

Just wondering if anyone can assist with helping me work out how much tax I am going to pay on a company car.

List price of vehicle is £18064 and co2 emissions are 96. Says on HMRC website that this equates to £4877 for the car and £6507 for the private fuel. Then underneath there is something that says tax liability indicator and this has the values at £975 for the car and £1301 for the fuel.

Do I just divide the combined total of £975 and £1301 by 12 and then that comes off my salary? Trying to get an idea of how this will affect my salary but can’t find a calculator online anywhere. If its going to take a big chunk out it may not be worth me taking it.

Any help appreciated.

BoGoF

What is your gross salary?

The figures you have quoted assume you will remain a basic rate taxpayer which may not be the case.

Boppy30

Annual salary of £22,430. Pay 5% into a pension and have a student loan (plan 1). No other deductions other than NI and PAYE.

BoGoF

Boppy30 wrote: »

Annual salary of £22,430. Pay 5% into a pension and have a student loan (plan 1). No other deductions other than NI and PAYE.

So your figures seem accurate.

Unless your personal mileage is substantial you would be best not taking the fuel option.

Boppy30

Thank you for the reply. Is there any way to work out what my salary will be once I receive the car and fuel card?

I do a lot of private mileage (approx 200 - 250 miles) per week so am thinking it would help with fuel costs as there will be no restrictions.

Dazed_and_confused

Your salary shouldn't change. Do you mean take home pay?

If so the best you can probably do for the moment is to look at your 2019:20 tax code (use your Personal Tax Account on gov.uk if necessary) and replace any car benefit or car fuel benefit entries with £4877 for the car and £6507 for fuel.

That gives you an estimated new code number.

Then check your March payslip to see what your taxable pay figure is (this is often different to your "salary" due to pension contributions) and you can use a site like listentotaxman to see what the tax and NI deductions are (using 2019:20 tax year).

But based on everything you have said in this thread it is likely to be around £190 extra tax each month. You should be aware that it won't necessarily be evenly spread. You might for example pay nothing extra for the first month or two after getting the car and then pay an extra £230/month for the remaining ten months of the tax year. But it all works out the same over the course of the year. You can probably notify HMRC about the car/fuel yourself and get you tax code updated quicker to spread it out as evenly as possible.

Boppy30

Apologies, i'm probably being really dumb here. I've just logged on to my personal tax account and cannot see where you input the figures - it just mentions National Insurance contributions.

My current tax code is 600T (already have a vehicle and car) but I am unsure how I work out what the new tax code will be.

Also, when you say it equates to roughly £200 per month, is that based on all other deductions being taken (inc NI, PAYE, student Loan and Pension) and then a further £200 from that? It seems very steep compared to what I get deducted at the moment (total PAYE is approx£250 per month]?

Dazed_and_confused

Sorry but I don't what you are referring to.

If it is just to see what your tax code would be then there is nothing to "input". You just need to look at your current tax code for 2019:20 - whatever is replacing 600T - and then remove the existing car and fuel benefit values and include the new car and fuel benefit values in the calculation (in your head or print a screenprint from gov.uk and change that).

If you mean you want to notify HMRC about a new company car sorry but I haven't done that myself so know you should be able to do it but not how.

Based on what you have told us so far the extra tax would be about £2276 for a full tax year with the new car and fuel.

You have effectively got an extra "income" of £11,384 (£4,877 for the car and £6507 the fuel).

Combined with your £22k salary you will still be a basic rate payer (assuming you haven't neglected to tell us anything important) so have 20% tax to pay on the £11,384 benefits.

It's just the same tax you would pay on extra salary of £11,384. In fact you would have to pay national insurance on extra salary. And you have the car available to use.

Boppy30

Thank you again for the reply. I have not yet received my new tax code for the year 2019/2020.

I am still unsure how to remove the existing benefit values and input the new ones in order to create a new code. Maybe it will become clear when I get the new code.

So I currently earn £22k per year, add on the value of the car and fuel to make an effective salary of £33, 384. Do I still get the tax free allowance of £12,500 but then pay 20% tax on the remaining £20, 884?

It's difficult to know which vehicle to choose when I am not clear how it will affect my take home pay.

Many thanks