P11D is a form that provides HMRC (Her Majesty’s Revenue and Customs) information about certain benefits you’ve received from your employer, apart from your salary. It is a charge which is incurred whenever a car or van is made available (without any transfer of ownership) for private use to an employee (or a member of their family, although the tax is paid by the named employee) by reason of their employment.
The P11D value of your car is used to calculate and determine the amount of company car tax you will pay, in combination with the car’s CO2 emissions. The P11D value of a car is made up of the list price of the vehicle inc VAT, plus the cost of any factory fit options you may have chosen to add to the vehicle plus the delivery charge. It does not include the car’s first registration fee or the annual road tax. If the employee has driver paid options, this is not included but should the vehicle be reallocated then the next driver will be liable for the P11D value including options.
How is it calculated?
To calculate annual car tax, the P11D value is multiplied by the percentage rate of income tax you pay (20% , 40% or 45%) and by the benefit in kind tax band dictated by the vehicle’s carbon dioxide (CO2) emissions.
- Take your car’s P11D value which is made up of the list price (inc VAT) plus any factory fit options plus the delivery charge.
- Multiply that P11D value by the vehicle's company car tax rate from a sliding scale depending on the car’s official CO2 output to establish your Benefit in kind amount (BIK) – please see below for the link to the car fuel and emissions data.
- Multiply that BIK amount by your personal tax rate (20%, 40% or 45% ) to get your company car tax payable.
Here’s a vehicle we have calculated for you.
- Taxable list price of the vehicle incl VAT is £26,550 x 0.21 (CO2 130 band) = £5575.00
- What is your rate of tax (20%, 40%, 45%) let's assume 20%
- £5575.00 x 0.20 = £1,150.10
- £1,115.10 / 12 = £92.93
The Benefit in Kind is £92.93 per month
Please note for LCVs the cost of tax is a set £3150.00 per annum.
For further advice and assistance, please speak to your local tax office or access the link below for the HMRC website.
Information partly sourced from www.gov.uk