Company cars are taxed if there’s private use
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
