Company Car Tax difference calculation

Bounce · 3 Aug 2020 at 10:28

Can someone help me in calculating the Company car tax (Benefit in kind Tax) difference between the following two cars ;

Car A (old car) -
Mercedes C-Class C350E (Hybrid Petrol)
CO2 : 48
P11d Value : £44,572
Engine size : 1991
Registration date 21st March 2017

Car B (new car) -
Mercedes C-Class Estate C220d (Diesel)
Co2 : 119
P11d Value £41,755
Engine Size : 1950
RDE Step 2 : Yes
Registration date : 10th September 2019

Mercenary Keyboard Warrior · 3 Aug 2020 at 10:49

https://comcar.co.uk/companycar/tax/select/

Ahleckz · 3 Aug 2020 at 11:17

BIK = P11D Value * BIK % * your marginal rate of tax.

Assuming you're a 40% tax payer:

A - 44572*12%*40% = £2139.46
B - 41755*26%*40% = £4342.52

£2203 (£183 a month) worse off with the new car.

Martynt74 · 3 Aug 2020 at 11:52

Ahleckz said:
BIK = P11D Value * BIK % * your marginal rate of tax.

Assuming you're a 40% tax payer:

A - 44572*12%*40% = £2139.46
B - 41755*26%*40% = £4342.52

£2203 (£183) better off with the nwe

You mean worse off, "B" is the new car.

Bounce · 3 Aug 2020 at 11:56

Ahleckz said:
BIK = P11D Value * BIK % * your marginal rate of tax.

Assuming you're a 40% tax payer:

A - 44572*12%*40% = £2139.46
B - 41755*26%*40% = £4342.52

£2203 (£183) better off with the nwe

What do you mean by nwe?

So if 20% tax payer its half the amount?

Kenai · 3 Aug 2020 at 12:03

Bounce said:
So if 20% tax payer its half the amount?

Yes, or if you straddle the 20/40% bands, a mixture of the two, depending on exactly how you span them.

You'll get taxed by a reduction in your personal allowance, so you may find some of your salary then ends up in the 40% bracket if you're close to it but not in it

Ahleckz · 3 Aug 2020 at 12:06

Marvt74 said:
You mean worse off, "B" is the new car.

Yes, sorry. I just assumed the hybrid was the newer one! Not many people going from hybrid to diesel...

Bounce said:
What do you mean by nwe?

So if 20% tax payer its half the amount?

See my edit, the new car you are worse off by a tune of £183 a month or £92 if you're a 20% taxpayer. But see Kenai's message.

2004typer · 3 Aug 2020 at 12:16

Diesel cars are becoming increasingly very expensive to run as a company car - much better opting for a petrol hybrid.

Unless I suppose you are doing massive personal mileage (assume company will pay you back for any work mileage so fuel type not really a factor).

Are you forced to have the diesel or can you change?

Pudney · 3 Aug 2020 at 13:10

Ahleckz said:
See my edit, the new car you are worse off by a tune of £183 a month or £92 if you're a 20% taxpayer. But see Kenai's message.

I didn't check your calculation for Car A, but Car B is actually even worse as it's a 32% BIK, not 26%.

[TW]Fox · 3 Aug 2020 at 13:13

2004typer said:
Diesel cars are becoming increasingly very expensive to run as a company car - much better opting for a petrol hybrid.

Which interestingly is resulting in significant increases in fuel spend for companies, and presumably higher overall co2 emissions.

Minxy · 3 Aug 2020 at 18:21

[TW]Fox said:
Which interestingly is resulting in significant increases in fuel spend for companies, and presumably higher overall co2 emissions.

Probably primarily because a lot of people won’t have the ability to charge them at home.

2004typer · 3 Aug 2020 at 18:33

Pudney said:
I didn't check your calculation for Car A, but Car B is actually even worse as it's a 32% BIK, not 26%.

Crikey - the government have really got it in for diesels.

I had a Mondeo diesel until a year ago as a company car, fortunately gone now (was a really comfortable car though). I'm in a Kia Niro PHEV now, is loads cheaper. The electric range works great for me, trips out for work are mostly in the 40 to 50 mile range so can do most of this on electric. Still get paid 15p mile for work use, but only costs about a quid to charge to do approx. 33 miles, so I'm probably in pocket every time I use it.

Clearly - if I do a much larger trip this wouldn't apply due to the electric range being less of the overall proportion.

[TW]Fox · 3 Aug 2020 at 18:53

Minxy said:
Probably primarily because a lot of people won’t have the ability to charge them at home.

Or won't care if they have a fuel card or drive further than the typically 20-30 mile range most of them have.

Tinders · 3 Aug 2020 at 19:35

Our company removed the fuel card perk years ago, for me as soon as i hit the higher tax bracket, it wasnt worth while. We have another type of fuel card now, where we just pay back our personal spend. When we move to a alternative fuel car, we even have to give up that fuel card, and claim as per the AFR rates.

PHEV all the was now, even if you do lots of personal miles, the BIK saving makes up for it.

Edit, also not that you can take off any personal contribution you may make for options or trade up, to make the tax less.