Company Car Tax

In the past, the company car tax system was based on the amount of business mileage driven in a year; however, since April 2002, the system changed so that the level of tax now varies according to the level of the company car's carbon dioxide (CO2) emissions, measured in grams per kilometre (g/km). The higher the car's emissions, the higher its tax liability.

Working Out Your Tax Liability

  • Find out your company car's carbon dioxide emissions in grams per kilometre (g/km).
  • Use the table (below) to look up the tax liability percentage this equates to. For example in 2006/7 a petrol car with a CO2 emission of 180 g/km equates to 23%. Diesel cars attract a 3% supplement on petrol percentages (capped at 35%), so a diesel with the same 180 g/km CO2 emission will equate to 26%.
CO2 emissions (g/km)
% of P11D price to be taxed
To 2007/08
2008/09
Petrol
Diesel
-
120 or less
10
13
140
135
15
18
145
140
16
19
150
145
17
20
155
150
18
21
160
155
19
22
165
160
20
23
170
165
21
24
175
170
22
25
180
175
23
26
185
180
24
27
190
185
25
28
195
190
26
29
200
195
27
30
205
200
28
31
210
205
29
32
215
210
30
33
220
215
31
34
225
220
32
35
230
225
33
35
235
230
34
35
240
235
35
35
  • Alternative-fuel cars have lower tax liability than respective petrol cars.
    • Petrol-electric hybrids: deduct 2% tax, plus 1% for every 20 g/km of carbon dioxide emissions below 140g/km
    • Electric cars: deduct 6%
    • LPG and CNG bi-fuel cars: deduct 1% plus a further 1% for every 20 g/km of carbon dioxide emissions below 140 g/km
  • You will then need to find out your car's P11D price; this is the list price including any options, but excluding the cost of first registration and road tax.
  • Multiply the car's P11D price by the tax liability percentage.
  • Multiply this figure by your rate of income tax: 22% (basic) or 40% (higher rate) to find your company car tax bill.
  • For example, if you have a company car with P11D price of £15,000, a CO2 emission of 180 g/km resulting in a percentage rate of 23%, and you pay the basic tax rate of 22%, the calculation would be as follows:

£15,000 x 23% x 22% = £759