Company Car - Personal Allowance

Columbogarbs

Hi

I'm looking for some advice on my personal tax allowance please.
I started a new job in January 2021 which included a company car, its my first company car and i'm still getting my head around the figures.

The car has a list price of £21.395 & a BIK of 26%, Therefore the benefit equals £5562.
I notice my personal tax allowance has reduced by £5562 for the car, which makes sense.

However, the PD11 adcice sheet my firm gave me states:

Annual car benefit (£21.395 x 26%) = £5562
Less £4161 reduction for days not available (273 days) = £1401
Fuel was provided for personal use but was made good by the employee.
Total Value of Company Car Benefit = £1401
Total Value of Fuel Benefit = £0

So my question is, Is it correct my personal allowance gets reduced by £5562? Or should it be £1401?

I have just cleared up a mistake with HMRC where i was recently on a 'K25' tax code, But i'm still not 100% sure i'm on the correct code!
I dont quite understand the "reduction for days not available, 273 days" bit either!!

Thanks in advance.

RacingDriver

As you got the car in January 2021 this is part way through the tax year of 6th April 2020 to 5th April 2021.  Therefore for the first 273 days of the tax year you did not benefit from the car.

£5562 / 365 = £15.23... per day
£15.23 * 273 days  = £4,160 deduction

Columbogarbs

Thankyou, that makes sense now, So the £5562 is a full year. 

So that reduction from my allowance will be correct.