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What is the P11D value and how to calculate it?

P11D tax

The P11D is a type of tax that Her Majesty’s Revenue and Customs (HMRC) require all employers to pay. It determines the coequal cash value of all the benefits, like enforcing payments to minimum wages and child health care supplied during the tax year. Whereas, the P11D value of the vehicle is the initial stage of calculating company car tax.

Benefits included in the requirement of a company vehicle available for private use (including the pick and drop from your place and work) is crucial to both Company Car Driver and the Fleet Manager.

For Fleet Managers

The P11D for Fleet Managers is used to decide the Class 1A National Insurance Contributions – The amount your company needs to pay on the benefit provided to the employee and an essential data point to calculate the Whole Life Cost of the vehicle.

For Drivers

The P11D tax for Company Car Drivers is used to specify the Benefit-in-Kind (BIK) Tax liability for the vehicle.

The P11D number helps calculate the company car tax constituted with vehicle delivery charges and the list price of the vehicle, excluding the first registration and annual road tax, except for the VAT.

Keep in mind that the P11D Form is an entirely different commodity than the P11D Value.

The below example explains the P11D value varies from the original road price of the vehicle.

  • Vehicle Road Price   =   £15,999
  • Vehicle Listing Price     =   £14,700 inc. (VAT)
  • Vehicle Delivery Price  =  £650
  • Yearly Road Tax     =   £145
  • Initial Registration Fee  =  £55
The total P11D Value of the vehicle is = £15,350 (Including Vehicle List Price & Delivery Price)

P11D – How to Calculate and What to Determine?

Company car tax is carried out by procreating your P11D value by the vehicle’s CO2 emissions tax band percentage, whereas the recently projected rates can be found here.

The final amount you encounter is your Benefit-in-Kind (BIK) tax and will be thereafter multiplied by your income tax rate percentage.

The ongoing tax rates can be seen in the table below:

Standard Rate of 20%£11,851 to £46,350
Higher Rate of 40%£46,351 to £150,000
Additional Rate of 45%Above £150,000

Therefore, in case your company vehicle’s emissions fall under the 110-114 bracket, that is (21% CO2-based tax band) while your salary is between £11,851 – £46,350, that is (20% basic income tax rate).

With the help of P11D, the value of £15,350 (from the above example in the article); your company car tax will be £644.70.

For more on Taxes, visit WLTP and vehicle taxes.

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