Company car & Tax amount

FLM14

Hope someone can help hopefully with a simplified answer.

I am currently on 26k a year tax code 1250L

Been offered a new job £26 plus a company car valued at £24k.
.
So will I now pay tax on 49k & will my tax free amount still be 1250L

It's a better job but I don't to be losing money obviously.:cool:

esmerobbo

You can work it out here.

https://comcar.co.uk/companycar/tax/select/

Scrapit

FLM14 wrote: »

Hope someone can help hopefully with a simplified answer.

I am currently on 26k a year tax code 1250L

Been offered a new job £26 plus a company car valued at £24k.
.
So will I now pay tax on 49k & will my tax free amount still be 1250L

It's a better job but I don't to be losing money obviously.:cool:

None of the above.
Your tax code will reduce and you'll pay tax on the benefit that is the use of the car. See the link above.

DoaM

I'm not sure my tax code has reduced since I've had my company car. All that happens is that the BIK value (Benefit In Kind) of the vehicle is calculated annually (based on list price, emissions and taxable rate - e.g. 23%), divided by 12 to give a monthly amount, then that value is "added" to my salary to calculate the taxable amount, whereby I'm taxed at my marginal rate.

In the OP's case they'll remain in the 20% tax band as their highest rate as they'll come nowhere near the 40% tax band.

For a £24k car, assuming the emissions lead to a 23% taxable rate then the annual equivalent BIK is £5,520. Monthly this is £460. Therefore OP will pay £92 per month additional tax (approximately).

TadleyBaggie

The last time I had a company car I definitely had my tax code reduced to ensure the tax on the BIK was paid.

BoGoF

DoaM wrote: »

I'm not sure my tax code has reduced since I've had my company car. All that happens is that the BIK value (Benefit In Kind) of the vehicle is calculated annually (based on list price, emissions and taxable rate - e.g. 23%), divided by 12 to give a monthly amount, then that value is "added" to my salary to calculate the taxable amount, whereby I'm taxed at my marginal rate.

In the OP's case they'll remain in the 20% tax band as their highest rate as they'll come nowhere near the 40% tax band.

For a £24k car, assuming the emissions lead to a 23% taxable rate then the annual equivalent BIK is £5,520. Monthly this is £460. Therefore OP will pay £92 per month additional tax (approximately).

Your employer must have elected to 'payroll' the benefit in kind. I think for the majority of cases the tax code is reduced to reflect the benefit.

DoaM

Maybe I'm mis-remembering ... I've had a company car for about 9 years now. All I know is that my payslip shows a tax code of S1262LC (Scotland, and personal allowance is £12,500 but I get an additional £120 job-related allowance) so is correct - it's not reduced to account for BIK.

The payslip also shows a BIK CARBEN value, and calculations for Income Tax and NI as deductions.