Tax: what is company car tax?

If a company provides an employee or director with a car for business and private use, it is taxed – provided the employee or director earns £8500 or more per year. This is known as company car tax. Tax is also payable if the company provides a member of their family or household with a car. Private use includes commuting – and the car merely has to “be available to you” for private use. Company car tax is sometimes called benefit-in-kind tax (BiK in shorthand). The taxman believes you are getting an additional benefit outside of work from work-supplied equipment, so he taxes you on it. The amount of company car tax you pay is broadly determined by:

• The list price of the car and any accessories fitted to it.
• The car