Company Car Tax Rates 2018-19 Calculator
Calculate your company car tax liability for the 2018-19 tax year with our accurate tool
Your Company Car Tax Results (2018-19)
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:
- 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
- CO₂ Emissions: Measured in grams per kilometre (g/km), this is the primary determinant of your tax band
- Fuel Type: Diesel cars typically attract a higher supplement (3% in 2018-19 for non-RDE2 compliant models)
- Your Income Tax Band: Basic rate (20%), higher rate (40%), or additional rate (45%) taxpayers pay different amounts
- 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:
- Determine the BIK percentage based on your car’s CO₂ emissions and fuel type
- Calculate the BIK value by multiplying the P11D value by the BIK percentage
- Adjust for availability by multiplying by (days available / 365)
- Subtract any capital contributions (capped at £5,000)
- Apply your income tax rate to get your annual tax liability
- 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:
- Choose a lower-emission vehicle: Cars with CO₂ emissions below 100 g/km attract significantly lower BIK rates
- 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
- Opt for RDE2 compliant diesels: These avoided the 4% diesel supplement that applied to older diesel models
- Make a capital contribution: Paying up to £5,000 toward the car’s cost reduces the taxable value
- Limit private use: If the car is only available for part of the year, your tax liability is proportionally reduced
- 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.