As an employer, if you provide company cars or fuel for your employees’ private use, you will 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 are travelling to a temporary place of work.
Find out about tax on company cars if you are an employee (external link).
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 (external link) 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.
For electric cars and other cars with CO2 emissions of 75 grams per kilometre or less, answer ‘no’ to the question ‘is the car provided via an optional remuneration arrangement?’.
Work Out the Value Manually
You can also work out the value manually on P11D working sheet 2 (external link). You will 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 (external link)
- the amount of time the car is unavailable during the tax year (for example, because of a mechanical fault)