Company cars - guidance for employers
If you make a car available to your employees and it is available for private use (including commuting), your employees have to pay tax on the benefit of this. In the same way, they have to pay tax if you provide free or subsidised fuel for private use in that car.
Where these benefits are taxable, employers and other providers (but not employees) are liable to pay Class 1A NICs.
In general, the benefit charge is lower for cleaner and cheaper cars. This is to encourage you and your employees to choose cars which are less damaging to the environment.
This page provides links to information to help you understand how the benefit charge is calculated.
- Car and car fuel benefit calculator
- Changes to car benefit rules from 2008/09
- CO2 emissions figures (link to external site)
- Advisory fuel rates for company cars
- Internet guidance on benefits in kind
- Booklet 480, expenses and benefits, a tax guide (see chapters 11-13)
- Booklet CA33, Class 1 National Insurance contributions on car and car fuel benefits, a guide for employers
