Company Car Tax Rates 2018 19 Calculator

Calculate your company car tax liability for the 2018-19 tax year with our accurate tool

Comprehensive Guide to Company Car Tax Rates 2018-19

The 2018-19 tax year brought significant changes to company car taxation in the UK, with adjustments to benefit-in-kind (BIK) rates and new considerations for diesel vehicles. This guide explains how company car tax is calculated, what changed in 2018-19, and how to minimise your tax liability.

How Company Car Tax is Calculated

Company car tax is based on several key factors:

1. P11D Value: The list price of the car including VAT and delivery charges, but excluding the first year’s road tax and vehicle registration fee
2. CO₂ Emissions: Measured in grams per kilometre (g/km), this is the primary determinant of your tax band
3. Fuel Type: Diesel cars typically attract a higher supplement (3% in 2018-19 for non-RDE2 compliant models)
4. Your Income Tax Band: Basic rate (20%), higher rate (40%), or additional rate (45%) taxpayers pay different amounts
5. Car Availability: The number of days the car is available for private use

Key Changes in 2018-19

The 2018-19 tax year introduced several important changes:

• Diesel Supplement Increase: Non-RDE2 compliant diesel cars saw their supplement increase from 3% to 4% (though the overall BIK rate was capped at 37%)
• New WLTP Testing: The Worldwide Harmonised Light Vehicle Test Procedure (WLTP) was introduced, though 2018-19 still used NEDC-correlated figures
• Electric Vehicle Incentives: Pure electric cars continued to benefit from the lowest BIK rates (13% in 2018-19)
• Hybrid Adjustments: Plug-in hybrids saw their BIK rates determined by their electric range

2018-19 Company Car Tax Bands

The table below shows the BIK percentages for 2018-19 based on CO₂ emissions:

CO₂ Emissions (g/km)	Petrol BIK %	Diesel BIK % (non-RDE2)	Diesel BIK % (RDE2)
0	13%	13%	13%
1-50	16%	19%	16%
51-75	19%	22%	19%
76-94	22%	25%	22%
95-99	23%	26%	23%
100-104	24%	27%	24%
105-109	25%	28%	25%
110-114	26%	29%	26%
115-119	27%	30%	27%
120-124	28%	31%	28%
125-129	29%	32%	29%
130+	37%	37%	37%

Note: For diesel cars registered before 1 January 1998, the BIK percentage was 37% regardless of CO₂ emissions.

Calculating Your Company Car Tax

The calculation follows these steps:

1. Determine the BIK percentage based on your car’s CO₂ emissions and fuel type
2. Calculate the BIK value by multiplying the P11D value by the BIK percentage
3. Adjust for availability by multiplying by (days available / 365)
4. Subtract any capital contributions (capped at £5,000)
5. Apply your income tax rate to get your annual tax liability
6. Divide by 12 for your monthly tax liability

For example, a petrol car with:

• P11D value: £30,000
• CO₂ emissions: 120 g/km (28% BIK rate)
• Available 365 days
• Basic rate taxpayer (20%)

Would calculate as:

£30,000 × 28% = £8,400 BIK value
£8,400 × 20% = £1,680 annual tax
£1,680 ÷ 12 = £140 monthly tax

How to Reduce Your Company Car Tax

There are several strategies to minimise your company car tax liability:

1. Choose a lower-emission vehicle: Cars with CO₂ emissions below 100 g/km attract significantly lower BIK rates
2. Consider electric or hybrid: Pure electric cars had a 13% BIK rate in 2018-19, while hybrids benefited from reduced rates based on their electric range
3. Opt for RDE2 compliant diesels: These avoided the 4% diesel supplement that applied to older diesel models
4. Make a capital contribution: Paying up to £5,000 toward the car’s cost reduces the taxable value
5. Limit private use: If the car is only available for part of the year, your tax liability is proportionally reduced
6. Consider salary sacrifice: Some schemes allow you to sacrifice salary for a company car, which can be more tax-efficient

Company Car vs Car Allowance

Many employees face the choice between a company car or a car allowance. The table below compares the two options for a typical higher-rate taxpayer (40%) in 2018-19:

Factor	Company Car	Car Allowance
Upfront Cost	None (employer provides)	Must purchase/lease car
Running Costs	Typically covered by employer	Your responsibility
Tax Implications	BIK tax based on car value	Allowance is taxable income
Flexibility	Limited to employer’s choices	Choose any car
Depreciation Risk	Employer’s responsibility	Your responsibility
Typical Monthly Cost (£)	£200-£600 (tax only)	£400-£800 (lease + tax)

For most employees, the company car option is more cost-effective unless you prefer to drive a very expensive car or have very low annual mileage.

Common Mistakes to Avoid

When dealing with company car tax, many people make these errors:

• Ignoring the diesel supplement: Forgetting that diesel cars (especially pre-RDE2 models) attract higher BIK rates
• Not considering electric range: For plug-in hybrids, the electric range significantly affects the BIK rate
• Overlooking optional extras: Accessories fitted to the car (like alloy wheels or leather seats) increase the P11D value
• Forgetting about fuel benefit: If your employer also provides fuel for private use, this attracts an additional tax charge
• Not reviewing annually: Tax bands and your personal circumstances may change each year
• Assuming new is better: Sometimes an older car with lower emissions can be more tax-efficient than a newer higher-emission model

Official Resources and Further Reading

For the most accurate and up-to-date information, consult these official sources:

• GOV.UK: Rates and allowances for benefits in kind – Official HMRC guidance on company car tax rates
• GOV.UK: Calculate tax on company cars – HMRC’s company car tax calculator
• ICAEW: Company car tax guidance – Detailed professional guidance from the Institute of Chartered Accountants

Future Changes to Company Car Tax

While this guide focuses on 2018-19 rates, it’s worth noting that company car tax has undergone significant changes since then:

• 2020-21 onwards: Introduction of WLTP-based CO₂ figures, which typically show higher emissions than NEDC
• 2020-21: Pure electric cars dropped to 0% BIK rate (rising to 1% in 2021-22 and 2% in 2022-23)
• 2021-22: Diesel supplement reduced to 3% for non-RDE2 compliant models
• 2025 onwards: Planned increases in BIK rates for all vehicles, though electric cars will remain most favourable

These changes reflect the government’s push toward lower-emission vehicles, particularly electric and hybrid models.

Frequently Asked Questions

Q: Do I pay company car tax if I only use the car for business?
A: No, company car tax only applies if the car is available for private use. If your employer provides a car that you’re not allowed to use privately (including for commuting), there’s no BIK charge.

Q: How is the P11D value determined?
A: The P11D value is the list price of the car including VAT, delivery charges, and any optional extras (up to £100), but excluding the first year’s road tax and registration fee.

Q: What counts as ‘private use’?
A: Private use includes any journey that isn’t purely for business, including commuting to and from work, personal errands, and family trips. Even occasional private use makes the car taxable.

Q: Can I avoid company car tax by paying for private use?
A: No, simply paying for private fuel doesn’t remove the BIK charge. The only way to avoid company car tax is to have no private use at all (including commuting).

Q: How does the diesel supplement work?
A: In 2018-19, diesel cars that didn’t meet the RDE2 standard had a 4% supplement added to their BIK rate (though the total couldn’t exceed 37%). RDE2 compliant diesels didn’t attract this supplement.

Q: Are there any exemptions from company car tax?
A: Very few exemptions exist. The main ones are for pool cars (shared cars not allocated to specific employees) and certain emergency vehicles.

Important Disclaimer: This calculator and guide provide estimates based on the information you provide and the 2018-19 tax rules. They should not be considered financial or tax advice. For precise calculations, consult a qualified tax advisor or use HMRC’s official tools. Tax rules may have changed since 2018-19, and individual circumstances can affect your actual tax liability. The authors accept no responsibility for any decisions made based on this information.