P11d Car Tax and Car Fuel Section F

P11d Car Tax and Car Fuel Section F. An employer can provide a car for its employee to use, but this is a taxable benefit. The amount of tax due is based on the list price of the car and accessories. 

The amount of P11d car tax to pay is based on the taxable value of the car provided.

The P11d taxable value of a car is a set percentage of the list price of the car provided plus accessories, less any contributions made by the employee.

How to Calculate the P11d Car Value

You will need to include certain information on the P11d form when you complete it:

  • Make and Model
  • Date First Registered
  • Approved CO2 emissions
  • Engine Size
  • Type of fuel (D – Diesel A – All other vehicles)
  • List Price
  • Accessories
  • Capital contributions
  • Amount paid by employee for private use

To start by working out the P11d Car Benefit in Section F you need to take the following steps:

1. Find the Car List Price for P11d

This will be the list price of the car on the date it was first registered including VAT, delivery, tax and number plates (before any discounts applied). 

The list price can be found on the original invoice or by contacting the manufacturer. 

If no list price can be found then use the market price of the car taking into account any accessories.

2. Add the Price of any Accessories to the Car List Price for P11d

Accessories added to the car must be included as part of the list price, including VAT, fitting and delivery charges. 

Accessories include any factory fitted options as well as anything fitted subsequently over the value of £100.

3. Deductions for capital contributions by the employee 

Whilst employees can make contributions towards the cost of a car provided you can only deduct up to £5,000 from the list price of the car for P11d purposes.

4. Find the appropriate percentage for the car

When working out the P11d car benefit value you need to find the appropriate percentage of the car.

This is the portion of the cars list price that becomes taxable based on a set percentage determined by the cars CO2 emissions. 

These percentages are set out by HMRC and for 2017/2018 are as follows:

Note: Column 2 relates to diesel engines, column 1 is for all other cars

5. Multiply the list price by the Appropriate Percentage

To reach the P11d value of the car multiply the results of steps 1 to 3 by the appropriate percentage.

6. Make any required deduction for periods when the car was unavailable, shared or contributions made by the employee towards private use.

The value that is captured on the P11d should only relate to any personal use of the company car as the rest of the time it is for business use (so should not impact the employee).  Therefore in order to reach the correct P11d value an adjustment should be made for times where the car was unavailable or any contributions the employee makes towards its cost.

Example of Calculating Car Benefit

A car with a list price (including standard accessories, VAT, number plates and delivery) of £18,000 is made available to an employee, with optional metallic paint costing £245 and CO2 emissions of 123g/km.

Before being made available to the employee it’s also fitted with an electrically-operated radio aerial from an independent manufacturer costing £95 (including fitting).

List Price of the Car for P11d

Car £18,000

Metallic Paint £245

Total List Price £18,245

The radio aerial is excluded as its total cost including fitting is less than £100.

Appropriate Percentage 23% (always round down when identifying the appropriate percentage)

P11d Benefit in Kind Value £4,196.35 (£18,245 x 23%)

P11d Value for Cars Adapted for an Employee with a Disability

Special rules apply when calculating the P11d value of a car adapted for an employee with a disability if the car is made available for private use.

It means that cars may be exempt for P11d purposes if it is provided:

  • for only journeys between home and work;
  • the car is adapted in accordance with the employees needs;
  • travel to work-related training;
  • there is no private use of the car.

P11d Value of a Classic Car

Establishing the P11d value of a classic car can be tricky, so HMRC sets out guidance to follow in these situations.

HMRC Definition of a Classic Car

A classic car is one which

  • is at least 15 years old on 5 April 2018;
  • has a market value of at least £15,000;
  • has a market value which is higher than the original list or notional price (including accessories).

P11d List Price of a Classic Car

If the car meets the definition above then the list price of the car becomes the price that the car might reasonably fetch if you sold it on the open market on 5 April 2018, taking into account all accessories on the car.  If the classic car was unavailable to the employee on 5 April 2018 then use the last day in the tax year 2017 to 2018 that it was available to the employee.

Calculating P11d Car Fuel Benefit

Car fuel benefit needs to be calculated where fuel is provided to an employee which covers business and personal miles. No declaration needs to be made on the P11d form if:

  • fuel provided was used for business purposes only;
  • the Director or employee reimburses the Business for personal fuel used (use the Advisory Fuel Rates when working out the amount to refund);
  • the business uses mileage allowance payments.

Car fuel benefit is calculated by multiplying the appropriate percentage (found in step 4 above) by an amount set by HMRC – this is £23,400 for 2018/2019.

Example of Calculating Car Fuel Benefit

The car in our example above has CO2 emissions of 123g/km.  The employee is provided with a fuel card to pay for both business and personal fuel during the tax year 2018/2019.  Therefore the taxable benefit that needs to be included on the P11d form of the employee is £5,382 (£23,400 x 23%).

Tips for Completing the P11d Form Section F Cars and Car Fuel

When it comes to completing the P11d form for a car and car fuel, certain information about the car needs to be included on the form so HMRC can see how the P11d benefit value was reached.  This information is:

  • Make and Model
  • Date First Registered
  • Approved CO2 emissions
  • Engine Size
  • Type of fuel (D – Diesel A – All other vehicles)
  • List Price
  • Accessories
  • Capital contributions by employee

You can enter up to two vehicles on the main P11d form so this covers the event that an employees car is sold and replaced in the tax year. 

It’s worth noting that you can only reduce the car and car fuel charges if a car is unavailable for a consecutive period of 30 days.

Anita Forrest
About Anita Forrest

Anita Forrest is a Chartered Accountant, spreadsheet geek, money nerd and creator of www.goselfemployed.co - the UK small business finance blog for the self-employed community. Here she shares simple, straight-forward guides to make self-employment topics like taxes, bookkeeping and banking easy to understand.