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. (To calculate the right fuel benefit for electric cars, choose fuel type ‘E’, not ‘A’. HMRC will correct this in January 2016.)

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 eg because of a mechanical fault

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