Skip to main content
Toggle search
Menu toggle

Company cars: calculating tax on car benefit - part 1

In the first of a series on company car tax, Julie Clift CTA, tax writer at Croner-i, explains the calculations when assessing company cars as a taxable benefit and defining reason of employment

One of the most common benefits offered by employers to their employees is a company car and fuel for private use.

According to Income Tax (Earnings and Pensions) Act 2003 (ITEPA 2003), s115(1) and HMRC Employment Income Manual EIM2310, a car for employment income tax purposes is a mechanically propelled road vehicle which is not a goods vehicle, motor cycle, invalid carriage or a vehicle of a type not commonly used as a private vehicle and unsuitable to be used as such.

Your free features:

  • Breaking news and expert analysis
  • Customisable daily newsletters
  • Six free CPD learning modules each year
  • Personalised CPD tracker
  • Top 75 Firms league tables
  • Regulatory changes
  • Hardman’s Tax Data

Sign up to Business & Accountancy Daily

Related Articles
Subscribe