Calculate tax on employees' company cars
As an employer, if you provide company cars or fuel for your employees’ private use, you’ll need to work out the taxable value so you can report this to HM Revenue and Customs (HMRC).
‘Private use’ includes employees’ journeys between home and work, unless they’re travelling to a temporary place of work.
Find out about tax on company cars if you’re an employee.
Work out taxable value
You can calculate taxable value using commercial payroll software.
Or you can use HMRC’s company car and car fuel benefit calculator if it works in your browser.
Using the HMRC calculator
Choose fuel type ‘F’ for diesel cars that meet the Euro 6d standard (also known as Real Driving Emissions 2). Choose type ‘D’ for other diesel cars.
Choose type ‘A’ for all other cars.
You can check a car’s CO2 emissions.
For electric cars and other cars with an approved CO2 emissions figure of 75g/km or less, answer ‘no’ to the question ‘is the car provided via an optional remuneration arrangement?’.
If your car has an approved CO2 emissions figure of 1 to 50g/km, you’ll also need to fill in the box for ‘zero emission mileage’ (also known as electric range). This is the distance the car can go on electric power before its batteries need recharging.
You can get your zero emission mileage figure from:
- your vehicle’s certificate of conformity, if you own the car
- the leasing company or fleet provider, if you lease the car
Work out the value manually
You can also work out the value manually on P11D working sheet 2. You’ll have to use this method if both of the following apply during the tax year you’re reporting on:
- the car was unavailable for at least 30 consecutive days
- you were providing fuel for private use, but stopped doing this
Taxable value of cars
The taxable value of a car is not the same as its cost. The taxable value also depends on:
- the car’s fuel type and level of CO2 emissions
- the amount of time the car is unavailable during the tax year (for example, because of a mechanical fault)