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What is a Company Car?
A business owns the car and provides it to an employee for use both for business and personally. There is then a tax charge, Income tax for the individual and National Insurance for the company.
Remember though that the car is a business asset, so there are corporation tax savings for the company too covered in more depth below.
What is the tax likely to be?
HMRC base their calculation on CO2 emissions and the price of the car.
Since April 2020 a company car with zero emissions has no tax to pay for the individual or the employer!
In April 2021 it will increase to 1%, and in April 2022 it goes up to 2% but assuming you are a basic rate taxpayer (current income under £50,000), based on a car that costs £30,000, the tax would be as follows: