Company Car Tax (UK) TRUE
FALSE 23% Lease Monthly cost £ £ £ £ £ £ £ £ £ £ £ £ £ £ £ £ £ £ £ £ £ £ £ £ £ £ £ £ £ £ 250 260 270 280 290 300 310 320 330 340 250 260 270 280 290 300 310 320 330 340 250 260 270 280 290 300 310 320 330 340 Adj CO2 emmission s 0.17 0.17 0.17 0.17 0.17 0.17 0.17 0.17 0.17 0.17 0.24 0.24 0.24 0.24 0.24 0.24 0.24 0.24 0.24 0.24 0.31 0.31 0.31 0.31 0.31 0.31 0.31 0.31 0.31 0.31
Higher 0.686 Rate Tax 0.686 Gross Monthly Tax £ £ £ £ £ £ £ £ £ £ £ £ £ £ £ £ £ £ £ £ £ £ £ £ £ £ £ £ £ £ 52 52 52 52 52 52 52 52 52 52 90 90 90 90 90 90 90 90 90 90 149 149 149 149 149 149 149 149 149 149
Contracted Out
Price Car A £ £ £ £ £ £ £ £ £ £ £ £ £ £ £ £ £ £ £ £ £ £ £ £ £ £ £ £ £ £ 16,000 16,000 16,000 16,000 16,000 16,000 16,000 16,000 16,000 16,000 19,500 19,500 19,500 19,500 19,500 19,500 19,500 19,500 19,500 19,500 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000 25,000
Gross Net Monthly Salary Cost + Tax difference £ £ £ £ £ £ £ £ £ £ £ £ £ £ £ £ £ £ £ £ £ £ £ £ £ £ £ £ £ £ 302 312 322 332 342 352 362 372 382 392 340 350 360 370 380 390 400 410 420 430 399 409 419 429 439 449 459 469 479 489 £ £ £ £ £ £ £ £ £ £ £ £ £ £ £ £ £ £ £ £ 224 230 237 244 251 258 265 272 279 285 261 268 275 282 289 296 302 309 316 323
Car B
Car C
Benefit in Kind (P11d) = List price + options - car sales tax.
The CO2 rate varies Gross from 15% Lease cost to 35%. See other sheet below
Tax = Price (Benefit in kind) x CO2% x Tax
£ 320 £ 327 £ 334 £ 341 £ 347 £ 354 £ 361 £ 368 £ 375 £ 382 This adjustment accounts for tax and NI you would have paid on the income if you didn’t have a
Contracted Out Net Salary difference (yearly) £ £ £ £ £ £ £ £ £ £ £ £ £ £ £ £ £ £ £ £ 2,684 2,766 2,848 2,931 3,013 3,095 3,178 3,260 3,342 3,424 3,134 3,217 3,299 3,381 3,464 3,546 3,628 3,711 3,793 3,875 -- Over 3 years -Actual Lease cost deduction from Salary (Net cost) £ 9,000 £ 9,360 £ 9,720 £ 10,080 £ 10,440 £ 10,800 £ 11,160 £ 11,520 £ 11,880 £ 12,240 £ 9,000 £ 9,360 £ 9,720 £ 10,080 £ 10,440 £ 10,800 £ 11,160 £ 11,520 £ 11,880 £ 12,240 £ 9,000 £ 9,360 £ 9,720 £ 10,080 £ 10,440 £ 10,800 £ 11,160 £ 11,520 £ 11,880 £ 12,240 £ 8,051 £ 8,298 £ 8,545 £ 8,792 £ 9,039 £ 9,286 £ 9,533 £ 9,780 £ 10,026 £ 10,273 £ 9,403 £ 9,650 £ 9,897 £ 10,144 £ 10,391 £ 10,638 £ 10,885 £ 11,132 £ 11,379 £ 11,626 £ £ £ £ £ £ £ £ £ £ 11,522 11,768 12,015 12,262 12,509 12,756 13,003 13,250 13,497 13,744
£ 3,841 £ 3,923 £ 4,005 £ 4,087 £ 4,170 £ 4,252 £ 4,334 £ 4,417 £ 4,499 £ 4,581 If this figure is less than running a private car (depreciation + servicing +loan interest) then the lease is good value.
This is the headline rate (Lease cost X 36 months)
This is the real cost after taking tax etc. into account.
C02 emissions (grammes/kilometre) Tax as % of car price 2004/05 2005/06 2006/07 155 140 140 15% 160 145 145 16% 165 150 150 17% 170 155 155 18% 175 160 160 19% 180 165 165 20% 185 170 170 21% 190 175 175 22% 195 180 180 23% 200 185 185 24% 205 190 190 25% 210 195 195 26% 215 200 200 27% 220 205 205 28% 225 210 210 29% 230 215 215 30% 235 220 220 31% 240 225 225 32% 245 230 230 33% 250 235 235 34% 255 240 240 35%
http://www.vcacarfueldata.org.uk/search/search.asp
DIESELS There is a additional supplement of 3% for diesel cars (fuel type “D” on form P46(Car)), up to the maximum charge of 35%.
There is a waiver of this supplement for Euro IV cars registered before January 1, 2006
Euro IV is a European Community standard for cleaner cars (fuel type “L” on form P46(Car)). Most new car manufacturers moved to Euro IV (or Euro4) during 2004. All new Diesel cars must meet Euro IV by Jan 2006
UK Car Tax Calculations
Key points Calculations are in protected cells, but there's no password. - Tools, Protection will unlock Cars with low CO2 figures work out significantly cheaper. Adding options to a company car, is expensive, e.g. a £500 option might cost £14 per month for 36 months. Most employers pay business miles at a different rate for Company and private cars. This will affect your total running costs. Tax Rates The adjustment for Net cost is done as a percentage on the highest rate of tax you pay (marginal rate of tax/NI). 100% - tax% - NI% 100-40-1 = 59% (NI = 1 % for 40 % taxpayers) 100-22-11= 67% (NI = 11% for 22% tax payers) 100-22-9.4=68.6% (NI = 9.4% for 22% tax payers in contracted out pension) If your salary is just over the 40% threshold such that company car payments take your taxable income below the threshold, then the adjustment should be somewhere between 59 and 67 Company car schemes are usually (but not always) the most tax efficient method of funding a car.
This spreadsheet is released under a Creative Commons Licence: http://creativecommons.org/licenses/by/2.0/ Disclaimer We believe the contents to be true and accurate as at the date of writing but can give no assurances or warranty regarding the accuracy, currency or applicability of any of the contents in relation to specific situations and particular circumstances. As such, the contents should not be relied upon and readers should not act upon this information without seeking appropriate professional advice. Simon Sheppard July 2005 www.ss64.com/office/
racted out pension)