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company van tax calculations

Glossary

4WD
The engine power is directed to front and rear wheels. This improves grip for both off-road vehicles and sports cars.
7G-Tronic
This automatic transmission has 7 forward gears for smooth, fast gear changes. The use of seven transmission ratios creates a large spread between the lowest and the highest ratio while at the same time maintaining an optimal, close-ratio configuration. The reduction in average engine speeds benefits fuel consumption as well as reducing noise. 7G-Tronic also includes Tipfunction which allows you to select the most appropriate ratio manually. Sport models with automatic transmission also feature steering wheel gearshift paddles for fingertip shifting precision.
9G-Tronic
This automatic transmission has 9 forward gears for smooth, fast gear changes. The use of nine transmission ratios creates a large spread between the lowest and the highest ratio while at the same time maintaining an optimal, close-ratio configuration. The reduction in average engine speeds benefits fuel consumption as well as reducing noise. 9G-Tronic also includes Tipfunction which allows you to select the most appropriate ratio manually. Sport models with automatic transmission also feature steering wheel gearshift paddles for fingertip shifting precision.
ABS
Anti-lock Brake System. This feature ensures that a vehicle`s brakes do not lock up when the driver needs to stop quickly. If the brakes lock then skidding is likely to occur. The driver is likely to feel a juddering in the brake pedal when the system operates.
Accessory fitted after delivery.
Any accessory, or set of accessories costing £100 or more (including fitting and VAT) will be added to the calculation of the cars price used in arriving at the BIK value. Unfair as it may seem, the accessory value will apply for the full period of the first year, as well as subsequent years.
Annual pre-tax fuel buyout
Most employers have realised that providing fuel for private use is not a tax-efficient perk. As a result many employers offer a useful sum to buy back this benefit.
Approximate private mileage
Insert an estimate for the calculator to show the post tax value of the free fuel perk.
AWD
Short for All Wheel Drive. Power to all the wheels is controlled all the time. Sometimes a vehicle computer will switch the percent of power fed to each of the wheels but the drive system cannot be switched manually and so is always on.
BEV
Battery Electric Vehicle
BIK
Benefit in kind is treated similarly to gross pay when it comes to income tax. A value has to be put on the benefit, and the Inland Revenue provides rules for most cases.
Boot capacity (litres)
The boot capacity is the boot capacity plus any extra space created by putting rear seats flat.
Classic car
To qualify as such for tax purposes, the car must be at least 15 years old at the end of the tax year and have a market value of over £15,000
CNG
Compressed Natural Gas which is the fuel used for gas-powered engines
CO2
The CO2 emission figure comes from the type approval test, and is set for the life of the car.
Combined MPG
The fuel consumption is the official figure for the combined cycle of EU Directive 80/1268/EEC as amended by 2004/3/EC.
Company car
Any car made available to an employee for private use, whether owned,leased or rented by the company.
Condition B MPG
The miles per gallon obtained from purely the internal combustion engine of a hybrid vehicle after the it has reverted from using solely it's electric battery to using it's internal combustion engine to increase the range available.
Corporation tax relief
Cars over 160gms are more expensive to lease since April 2009
CVT
Continuously Variable Transmission
Disabled Driver Relief
Any additions or modifications, that have to be made to a car in order to make it suitable for a disabled company car driver to drive on business, are not subject to company car tax. Disabled drivers who hold a blue badge and need automatic transmission can calculate their company car benefit by using both the lower CO2 emissions figure and the lower list price of the equivalent manual version. The price element was introduced from 6th April 2009, but the CO2 reduction has always been available to disabled company car drivers.
Doors
Hatchbacks on estates or other vehicles are counted as a door, even if not intended as a human entry point. Saloon bootlids are not counted. Doors are normally glazed in the higher portion.
DSG
Audi`s Direct Shift Gearbox transmission allows for gearlever or paddle changes, as well as automatic mode. Motors take the place of a conventional torque convertor so that there is no loss of performance or economy.
Dualogic transmission
A sophisticated, clutchless, 5-speed sequential manual shift with a selectable, fully automatic mode.
Durashift EST
(Durashift EST advanced manual) Electronic shift transmission EST. Floor mounted gear lever, hydraulic computer automated clutch with no clutch pedal, sequential manual mode with tip-up/tip-down gear changing, automated mode with kickdown function and hill climb and decent sensing.
Durashift Manual
Floor mounted gearlever, hydraulic driver operated clutch.
E-CVT
No gear changes. Optimum efficiency whatever the driving conditions. That's what happens with ECVT on a Lexus hybrid vehicle. ECVT is designed to make best use of the hybrid's petrol and electric motors by seamlessly blending an infinite number of gear ratios as you drive. It does this by combining planetary gears with a standard differential and results in stepless acceleration.
E-REV
Extended range electric vehicle
Easytronic
Choose the optional Easytronic transmission and you’ll get a five-speedd manual gearbox with a fully automatic mode. In manual mode, you simply push the lever forward or back to shift the gears up or down. The facia display tells you what gear you’re in – 1 to 5, N for Neutral or A for Auto. Switch to fully automatic mode and it has many features of a regular automatic including a kickdown function. There’s no clutch pedal so you can drive it on an automatic-only driving licence.
EBA
Electronic Brake Assistance. Detects emergency situations and makes braking faster and more powerful.
EBD
Electronic Brake-force Distributer. This feature will dynamically adjust the braking applied around a vehicle to suit its current weight distribution. This helps braking when on a corner, for example.
Engine size in litres
Figures provided to one decimal place. A good indication is usually given by the car description, but some makers such as BMW are confusing when the model number such as 320 indicates a 3 series, but not necessarily a 2 litre
EPS
Electronic Power Steering. This feature provides assistance to the driver when turning. It is included as standard on most modern cars.
ESP or ESC
Electronic Stability Programme or Electronic Stability Control.

ESP/ESC compares the driver's intended direction in steering and braking inputs, to the vehicle's response, via lateral acceleration, rotation (yaw) and individual wheel speeds. ESP/ESC then brakes individual front or rear wheels and/or reduces excess engine power as needed to help correct understeer (plowing) or oversteer (fishtailing).

Euro IV compliant diesel
Diesel cars meeting the Euro IV standard are not subject to an extra 3% tax charge (compared to petrol) if they were registered prior to 1st January 2006.(EU4 is another abbreviation used)
EV
Electric Vehicle
Expected mpg
Imperial measures still seem to be used despite fuel being sold in litres. The official EU Combined test figure is commonly used, but don't expect this in real life.
First registration fee
Currently £55 and generally included in the delivery charge, but not taxable as a benefit in kind.
Fuel costs
Average national fuel prices. (figures usually given in pence per litre)
Fuel Type
Petrol, diesel or alternative are the main choices. On the P11d these are split further into D for Diesel, E for zero emission cars, and A for everything else.
FWD
Front Wheel Drive. The engine power is directed to the front wheels of a vehicle to make it move.
Green Label
The Green label is the colour coded VED band.
I-Shift
The optional i-SHIFT (Automated-Manual Transmission) allows you to choose the way you want to drive. Select Manual mode for a more sporty drive using the gear shift, or paddle shifts on the steering wheel for optimum control. Automatic mode provides a more relaxed but equally exhilarating driving experience. i-SHIFT delivers all this with lower emissions and better fuel economy than a conventional automatic transmission.
Load volume (litres)
The load volume is the volume of the vehicle's boot with the seats in the upright position.
London congestion charges
Motorists driving into the central eight square miles of London will be charged per day. Discounts are available on cars running alternative fuels and vehicles with 9 seats or more (see congestion.biz).
LWB
Long Wheel Base. This refers to the distance between the front and back wheels of a vehicle. Sometimes manufacturers offer a variety of lengths on a single model. This abbreviation is used to help differentiate between them.
Manual
Transmission requiring the driver to use a clutch and gear lever.
Marginal tax rate
Benefits are added to your taxable income, and so will always be taxed at your highest rate. NI ignored here.
Mileage allowance
Employers can set whatever level they like. The tax free element is usually set annually . Employees can claim up to 45p taxfree for the first 10,000 business miles and 25p thereafter (as at 2013/2014)
Model Year
During September several manufacturers revise their model ranges and print new brochures. Prices and specifications may also change. The new models are then described as the following calendar year`s number. Sometimes the changeover is far from clearcut
MPV
Taller than estates, but definitely not vans, MPVs are built to carry 5 to 8 people in comfortable upright seats, sometimes at the expense of luggage space. Most people think of an MPV as being able to seat 7, but small cars seating 5 at a squeeze are also called "MPVs" if they have a high roof.
NCAP Rating
Where shown, click on the stars for the latest NCAP report on this range. It may not be for the exact model, but serves as a guide.
Off road vehicle
Built to travel over rough ground, such vehicles have four wheel drive capability and higher ground clearance. The less capable, but more comfortable versions are now known as SUVs
P11d value of a car
The value of a car entered on the P11d form as part of the BIK calculation is based on the full on-the-road list price including VAT but excluding VED and the First Registration Fee. The value is not reduced by discounts or grants. Accessories fitted to the car should generally be included apart from telephone equipment or items to help the disabled. Extras which are related to the running costs of the vehicle such as extended warranty or servicing packages are excluded.
PAYE Coding Notice
Employees paying tax will receive a Pay As You Earn tax coding notice whenever their allowances and benefits change. The calculated value for Car Benefit will be shown on the right hand side.
Pensionable salary
Always includes gross salary but employers will often exclude bonus payments and car cash allowances when determining the level of salary on which pension contributions are to be calculated.
PHEV
Plug-in Hybrid Electric Vehicle
PiH
Plug-in Hybrid
Plug-in Car/Van Grant
You can get a grant towards the cost of each new electric (plug-in) car or van you buy, if it meets certain conditions.
Grants are available in 4 categories:
  • Category 1: The vehicles must have under 50g/km CO2 emissions and a zero emission range of at least 70 miles to receive 35% off the cost of the car, up to a maximum of £4,500
  • Category 2: The vehicles must have under 50g/km CO2 emissions and a zero emission range of between 10 and 69 miles to receive 35% off the cost of the car, up to a maximum of £2,500
  • Category 3: The vehicles must have between 50 and 75g/km CO2 emissions and a zero emission range of at least 20 miles to receive 35% off the cost of the car, up to a maximum of £2,500
  • Vans: The vehicles must have under 75g/km CO2 emissions and a zero emission range of at least 10 miles to receive 25% off the cost of the van, up to a maximum of £8,00
Pool car
A pool car is not taxable on an individual provided it is confined to business use, and any private use is purely incidental. The car should be available to and used by more than one employee, and should not be taken home.
PS
PS (Pferdestarke) is the near metric equivalent of BHP (brake horsepower). You need to divide PS by 1.0139 to convert to BHP.
Remote transmission
Where gears can be changed via buttons or paddleswitches on the steering wheel.
RWD
Rear Wheel Drive. The engine power is directed to the rear wheels of a vehicle to make it move.
S-Tronic
The revolutionary S tronic gearbox combines the agility and responsiveness of a conventional 6-speed manual gearbox with the convenience and smooth, uninterrupted power of an automatic transmission. The technical basis of the S tronic gearbox is the double clutch.
Seats
Include the driver`s and substantial fold out seats. Number of seats will be the same as the number of 3-point seat belts.
Service inclusive packs
Company car drivers should not be taxed on servicing costs, so if future servicing costs are paid for at the initial point of purchase, make sure that this element is not included in the list price for tax purposes.
Softip
Is a sequential 6-speed transmission. You can change up or down the gears by gently tapping the gear lever forwards or backwards. You don’t even need a clutch.
Speed Sensitive Steering
The amount of power assist increases at low vehicle speeds and decreases at higher speeds.
SUV
Sport Utility Vehicle. On road/off road automobiles.
SWB
Short Wheel Base. This refers to the distance between the front and back wheels of a vehicle. Sometimes manufacturers offer a variety of lengths on a single model. This abbreviation is used to help differentiate between them.
Switchtronic
ZF six-speed automatic transmission with torque converter, known for its especially smooth shifts and quick response. The driver may operate the transmission in Drive mode, letting the automatic do the shifting, or may manually select the gear desired. ALPINA developed SWITCH-TRONIC many years ago for just this purpose. Two buttons on the back side of the steering wheel make removing one’s hands from the wheel when shifting redundant. The right button shifts up, the left button down – enriching the driving experience, and difficult to describe in words
TCS
Traction Control System. It regulates power distribution to stop the wheels just spinning and wasting power when you put your foot down, which gives you extra control, safety and performance.
Tiptronic
A type of automatic gearbox which aims to give drivers the ability to change gear manually, or can be left in various automatic modes.
Touchtronic
The six-speed 'Touchtronic 2' fully automatic transmission uses shift-by-wire technology, and replaces the conventional gear lever with dashboard-mounted buttons to select Park, Reverse, Neutral and Drive modes.
ULEV
Ultra-Low Emissions Vehicle
VE103
The Vehicle on hire certificate (VE103) should be carried by all drivers of company cars, if the original V5 is not available, when travelling abroad. This includes trips to the Channel Islands and the Isle of Man. A letter of authority and photocopy of the V5 will not be adequate if you run into trouble.
VED
Abbreviation for Vehicle Excise Duty, payable annually or six monthly, and dependent on the fuel type and CO2 emissions . Also known as Road Fund Tax. Should be included in ''On the Road'' car price, but not treated as part of the benefit-in-kind. Used to be known as your tax disc. This system was replaced by an electronic system in October 2014 meaning you no longer are required to display a disc in your car windscreen.
Weighted MPG
A weighted average of the two figures obtained on the combined cycle, based on an assumption that the vehicle is driven 16 miles (25km) beyond its maximum electric range, using the engine as required without recharging.
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