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Everything you need to know about tax on company cars

Everything you need to know about tax on company cars

Taxes on company cars can be a confusing subject for many employees who use this benefit. Therefore, we've created this guide which covers everything you need to know about paying taxes on company cars to ensure you understand the amount of tax you'll be expected to pay.

What is a company car?

A company car is a car that has been issued to an employee by their employer for business and private use.

How does tax on company cars work?

You will be expected to pay tax on a company car that you or members of your family use privately - this includes the commute to work. The amount of tax on the company car that you're expected to pay depends on a variety of factors, including the cost value of the car if you were to buy it, as well as the type of fuel that the vehicle requires. You can calculate how much tax you will be expected to pay with the help of a tax advisor or accountant.

Can I reduce the amount of tax on my company car?

There are certain factors that can reduce the value of the company car, which is how the amount of tax is calculated. This will then reduce the amount of tax you are expected to pay. For example, you can reduce the amount of tax on your company car by:

Using it part-time

Using the company car part-time rather than full-time can considerably reduce the amount of tax you will be expected to pay on it as the value of the car to you has decreased.

Paying towards it

If you choose to pay towards the cost of the company vehicle, you can also reduce the amount of tax you will be expected to pay.

Ensuring low CO2 emissions

By ensuring that your vehicle has fewer CO2 emissions, you will pay a significantly lower amount of tax. This is because, as of April 2020, company cars that produce no carbon dioxide emissions attract a 0% Benefit-in-Kind (BiK) tax rate. If your company car is a hybrid, you can contact your employer to find out exactly what the vehicle's zero-emission mileage figure is. For more information about tax on company cars, or more general information about accountancy and tax advice, contact a member of our team at Taxcare Accountancy today.

Affordable Pay-monthly Packages

We offer a full range of services to limited companies, solo trader, partnership, charity, LLP, CIC as well as individuals. We have arranged our services into easy to choose packages that suit your needs.

Start-up
£ 60  / Month (+VAT)

This price plan is suitable for the start-up companies who are not VAT registered.

  • Year-end accounts preparation and submission
  • Corporation Tax returns
  • Payroll & RTI submission for 1 employee
  • Personal tax return [salary & dividends income only] (Free)*
  • File confirmation statement (annual return) with Companies House
  • Reference letters for Director only (Free)*
  • Assisting with correspondence from HMRC and Companies House
  • Unlimited face to face advice and email support
  • 1 Director
  • 1 Shareholder
  • Annual turnover should be less than 80K
Limited Company
£ 100  / Month (+VAT)

This price plan is suitable for the companies who are VAT registered and turnover is less than 100K with a couple of employees.

  • Year-end accounts preparation and submission
  • Corporation Tax returns
  • Monthly payroll including RTI submission for up to 2 employees
  • Personal tax return [salary & dividends income only] (Free)*
  • File confirmation statement (annual return) with Companies House
  • Reference letters for Director only (Free)*
  • MTD VAT returns submissions – quarterly
  • Unlimited face to face advice and email support
  • 1 Director
  • 1 Shareholder
  • Annual turnover should be less than 100K
Company Pro
£ 150  / Month (+VAT)

This price plan is suitable for the companies who are VAT registered; turnovers are more than 100K and have 2 directors and shareholders.

  • Company formation (if required)
  • Year-end accounts preparation and submission
  • Corporation Tax returns
  • Monthly payroll including RTI submission for up to 5 employees (Free)
  • MTD VAT returns submissions – quarterly
  • Personal tax return [salary & dividends income only] (Free)*
  • File confirmation statement (annual return) with Companies House
  • Reference letters for Director only (Free)*
  • Unlimited face to face advice and email support
  • 2 Directors
  • 2 Shareholders
  • Annual turnover should be less than 200K
Company Premium
Let's talk.  / 

This bespoke price plan is suitable for the companies who are VAT registered, with more directors, shareholders and employees. Also, annual turnover is more than 200k and requires further bespoke services.

  • Company formation
  • Year-end accounts preparation and submission
  • Corporation Tax returns
  • Monthly payroll including RTI submission all employees
  • MTD VAT returns submissions – quarterly
  • Personal tax return [salary & dividends income only] (Free)*
  • File confirmation statement (annual return) with Companies House
  • Reference letters for the all Directors (Free)*
  • Unlimited face to face advice and email support
  • Flexible and can be discussed
  • Annual turnover should be more than 200K

Add on Services

  1. Personal Tax Returns

    This price plan is suitable for self-employed individuals, landlords and those who need to submit Self-Assessment Tax Returns.

    If you need to submit the Self-Assessment Tax Return, we can offer you competitive prices starting from £150 + VAT. Price can vary according to your nature of income. Please contact us for more details.

  2. Tax Investigation
  3. Business Legal Support
  4. Company Formation
  5. Business Mentoring
  6. ARA accounting services for ATOL & ABTA travel companies

    Our commitment to you is that we’ll ensure all the information we’ve submitted to the Civil Aviation Authority is up-to-date and accurate. 

Taxcare Accountancy was formed to provide Small & Medium Businesses with an affordable, proactive and professional accountancy services…