COMPANY CAR TAX - BENEFITS IN KIND

A company car can be a great perk, but it doesn't come for free as the taxman takes a proportion of your earnings for the privilege. Since 2002, company car tax has been based on the list price of the car, its options and its recorded carbon dioxide emissions, rather than the number of miles covered, in a bid to encourage drivers to opt for more eco-friendly vehicles.

How much tax you pay for your company car now depends on three variables: the P11D cost of the car (this is its list price plus the cost of any options, but minus the on-the-road charges and any capital contributions you make towards the vehicle), the amount of CO2 that it emits and your personal income tax band.

Once you've got these pieces of information you are then in a position to calculate how much your chosen car will cost you each month in additional tax.

Multiply the P11D value of the car by the benefit-in-kind percentage that it's subject to based on its CO2 output. HM Revenue and Customs have applied a percentage to each model in a manufacturer's range. This is the proportion of the car's value that you'll be taxed on based on your personal income tax band, so multiply that by...