Budget 2011: company car tax

Majority of cars see 1% rise in BIK taxation
5% taxation remains for ultra-low emission cars
Diesel levy of 3% remains, £80,000 price cap abolished

Written by Parkers Published: 24 March 2011 Updated: 1 February 2017

The Budget announced this week outlined a number of changes to the current company car tax system.

But what exactly are the changes and what does it all mean for the Company Car Driver?

The Government announced in the budget that company car tax will increase by 1% for cars emitting between 95 and 219g/km CO2 on April 6, 2013.

Cars emitting between 75 and 95g/km CO2 will be eligible for 5% BIK taxation, while drivers of zero emission cars will still pay 0%.

The £80,000 price cap on company car list prices has also been abolished, meaning those with a company car worth more than the £80,000 limit will now have to pay company car tax the same as all other drivers.

The 3% surcharge for diesel cars remains in place, as illustrated in the table below.

% of P11d price (petrol)	% of P11d price (diesel)	2011/2012 g/km	2012/2013 g/km	2013/2014 g/km
10	13	Up to 120	Up to 99	Up to 94
11	14	N/A	99-100	94-95
12	15	N/A	101-105	95-100
13	16	N/A	106-110	101-105
14	17	N/A	111-115	106-110
15	18	121-125	116-120	111-115
16	19	126-130	121-125	116-120
17	20	131-135	126-130	121-125
18	21	136-140	131-135	126-130
19	22	141-145	136-140	131-135
20	23	146-150	141-145	136-140
21	24	151-155	146-150	141-145
22	25	156-160	151-155	146-150
23	26	161-165	156-160	151-155
24	27	166-170	161-165	156-160
25	28	171-175	166-170	161-165
26	29	176-180	171-175	166-170
27	30	181-185	176-180	171-175
28	31	186-190	181-185	176-180
29	32	191-195	186-190	181-185
30	33	196-200	191-195	186-190
31	34	201-205	196-200	191-195
32	35	206-210	201-205	196-200
33	35	211-215	206-210	201-205
34	35	216-220	211-215	206-210
35	35	221-225+	216-220+	211-215+

So, with all that in mind, take an example:

Car details:

VW Golf 1.6 TDi BlueMotion SE 5dr
CO2 Emissions: 107 g/km
Engine Size: 1598 cc
Fuel Type: Diesel
P11D Value: £19,155

Company car taxation for 2011/12

Car Benefit Percentage 13%
Cash Equivalent Value £2,490
Annual Tax at 20% £498
Monthly Tax at 20% £41.50

Company car taxation for 2012/13

Car Benefit Percentage 16%
Cash Equivalent Value £3,064.8
Annual Tax at 20% £612.96
Monthly Tax at 20% £51.08

Company car taxation for 2013/14

Car Benefit Percentage 17%
Cash Equivalent Value £3,256.35
Annual Tax at 20% £651.27
Monthly Tax at 20% £54.27

This means that in 2012/2013, compared to 2011/12, a company car driver will pay £9.58 more a month, or £114.96 extra a year. A smaller increase will occur between 2013/14 and 2012/13, with company car drivers paying an additional £38.31 a year based on the example above.

Compare 2013/14 to 2011/12 and a Company Car Driver will be paying an additional £153.27 a year.