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.

This guide is also available in Welsh (Cymraeg).

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.

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.

Taxable value of cars

The taxable value of a car is not the same as its cost. The taxable value also depends on: