Company car tax jargon buster
There are a few technical terms included in this article, so here’s a handy guide to what they all mean…
- Benefit in kind (BiK) – any benefit an employee receives that isn’t included in their salary.
- Emissions – the amount of carbon dioxide – or CO2 - a car emits from its exhaust.
- g/km – short for grams per kilometre, this is how the amount of carbon dioxide (CO2) is measured.
- HMRC – Her Majesty’s Revenue and Customs, government department responsible for collecting tax, amongst other things.
- List price – the manufacturer’s list price, which includes factory-fitted options and VAT, but excludes ‘on-the-road’ costs, such as delivery charges, the first registration fee, the first year’s road tax, number plates and fuel.
- P11D – the tax form you (as an employer) will need to fill in and send off every year.
- P11D value – the value of your company car including its list price, VAT, delivery charges and the value of optional extras, but doesn’t include road tax or first registration fee.
- Personal tax allowance – the amount of money you can earn without paying tax (currently £11,850).
- Tax year – a tax year runs from April 6 to April 5. The current tax year starts on April 6 2019 and will end on April 5 2020 – it is therefore called the 2019/2020 tax year.