Company Car tax - Is this right?
Discussion
I'm a newbie to company cars so forgive my ignorance...
If I get an electric car through our company, new from main dealer on a BCP.
Let's say P11D value is £100,000 and the monthly charge is £2,500...
The company pays £2,500pm
On a 45% tax bracket, the only tax I would pay for this £2,500pm is 45% of 2% of £100,000 per year (so, £75pm). And the company would pay employer NIC on this £2,500 at 15% of 2% of £100,000 per year (so £25pm).
Is that right? Have I missed anything?
If I get an electric car through our company, new from main dealer on a BCP.
Let's say P11D value is £100,000 and the monthly charge is £2,500...
The company pays £2,500pm
On a 45% tax bracket, the only tax I would pay for this £2,500pm is 45% of 2% of £100,000 per year (so, £75pm). And the company would pay employer NIC on this £2,500 at 15% of 2% of £100,000 per year (so £25pm).
Is that right? Have I missed anything?
Yes, in your example the Benefit-in-kind is £2k (2% of £100k) with the employee taxed at 45% on it.
The employer pays Class 1A NIC at 15.05% on the BIK, payable in one lump sum after the end of the tax year following the reporting of the BIK in the P11D.
The (lease) cost to the employer is irrelevant.
The employer pays Class 1A NIC at 15.05% on the BIK, payable in one lump sum after the end of the tax year following the reporting of the BIK in the P11D.
The (lease) cost to the employer is irrelevant.
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