Benefit in Kind on a company car is mechanical: P11D list price × appropriate percentage gives the cash equivalent. You then pay income tax on that figure at 20%, 40% or 45%. Employers also pay Class 1A National Insurance on the same cash equivalent.
HMRC publishes a table each tax year by CO2 and fuel type. Electric and very low-CO2 cars sit at the bottom. Older diesels that do not meet the RDE2 standard sit higher. The percentage is not negotiated in the contract.
What to keep
P11D list price (including VAT and accessories), first registration date, CO2 figure and the HMRC table for that tax year. Estimate the employee tax with the company car tax calculator. CarDiary will not file the P11D, but it will hold fuel, servicing and the dates that sit next to the benefit.
