company van tax calculations

Corporate Information

Employers have 3 big reasons to encourage company car drivers to choose a car with lower car tax. After basic salary, company car tax is likely to be the largest factor in determining net pay and tax. Through following a path to lower taxation, the company car fleet will also tend to produce less pollution as a consequence.

Improve employee's take home pay

This is obvious, but for many employees who begrudge paying tax on a car which is required for their job, it is less obvious how they go about finding out about the implications of the new tax regime. Comcar can help them choose the best car for their needs, with the minimum tax. Many company car drivers will not be able to opt out for the cash alternative because their job requires it, or they see difficulties in managing the problems of financing, maintaining and insuring their own vehicle. For those who see the company car as a mixed blessing, Comcar can be a useful tool in providing the information to improve the mix. A car chosen now could be subject to increasing levels of company car tax over the next three years. Since April 2003 those drivers with free private fuel have also seen that benefit taxed according to the car's CO2 emissions.

Reduce Employer's National Insurance costs

Class 1A NICs are calculated using information reported on P11Ds . If drivers are helped or encouraged to choose cars with lower tax, there will be a large saving on the fleet's Class 1A NI bill. With an increase of Employers NI this saving will become even more important. Fuel scale charges will also depend on the car's emissions levels.

Reduce car running costs

Generally the total costs of cars will vary in line with the tax. This is a broad assumption, but largely true because of the size of the car and its engine. VED is also now banded according to emissions.


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