Can someone talk me through company cars and tax codes?(9 Posts)
Is this the right forum or do I need to go elsewhere?
I'm currently waiting for my company car to be delivered and until then I've been given a hire car.
The car policy says I have to pay tax on the P11d value of the hire car and it's my own responsibility to check whether I'm on the right tax code and pay the right amount of tax. How do I find out whether they've got it right?
I'm a bit nervous as I know someone who had a long term hire car who hadn't had their tax code changed correctly so ended up underpaying tax and is still paying it off. Can't afford for that to happen.
There is a calculator on the HMRC website: www.hmrc.gov.uk/calcs/cars.htm Follow the link on the bottom of the page for the calculator - you will need the P11d value (list price) and the CO2 emissions figure. This will give you the taxable benefit, which you will then be able to use to check your tax code.
Do this for both the hire car (for whatever period you will have it for) and then your new car (from the date that it arrives) - this should then give you the full tax charge for the year.
Hope this helps!
You are right as is Ellypoo.
The Company should also send an annual form (P35 rings a bell, but don't quote me) to the tax office which will detail the car(s) you have been driving too. I failed to do what Ellypoo suggested and then when the Company notified HMRC my tax code was adjusted for the hire car that I drove for a few months (ended up owing money but the tax code just adjusted that so I paid it off monthly over the course of the year). The Company I work for is large so that form might just have been applicable because of its size so still best following link above
The employer will notify HMRC using a P46(car) - this is for all change to cars, so they will send one for hte hire car, and then another when you get your actual car.
At the end of each tax year, the employer will produce a P11d which details all taxable benefits each member of staff has had during the year - you will get this to check & keep for your records. However, you won't now get this until around this time next year. Once your employer has notified HMRC using the P46(car), you should receive a PAYE coding notice which will show you your new tax code - this is what you need to check to make sure the new code is correct (using the link in my first post will help with this). You should get one coding notice when you have your hire car, and then another one once you have taken delivery of your new car.
Actually the onus has shifted to the employee now to inform HMRC that the have a company car and if it has changed. This is fairly recent is to try prevent lag till P11Ds are at tax office.
This was the case for changes in company cars until last April. For first cars, it was still the employers responsibility, and it has now reverted back to the employers responsibility for notification of changes because of employees not realising/knowing how to notify HMRC.
Of course, if you think your employer would be slow in notifying HMRC, you could always try to do it yourself, but IME, the employer still needs to actually submit the form online.
Thank you for the advice - I'm at the moment waiting to hear back from HR as to how and where and who to contact in payroll to make sure this is all submitted asap. It's a huge company so often difficult to find the right contact.
Each employee can ( and should ) notify HMRC about any changes to their personal circumstances which will affect their PAYE Code Number. Changes to a Company Car fall into this area and therefore you can and should notify HMRC about this change. Your Employer / Employers have also a duty to notify HMRC about shuch information, but remember if they notify HMRC at the end of a Tax Year, they may have satisfied their liability to HMRC BUT you will be left with, potentially, a large underpayment.
The website, www.tell-hmrc.com, appears to make it quick and simple to notify HMRC about changes in respect of company cars.
Once you have the BIK figure is it then added to the annual income
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