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fleet-alliance2WHAT’S meant by P11D value of a company car? And is it different from the On The Road (OTR) price?

These are the questions company car drivers often ask.

The P11D value of a car is the list price of the car, plus the cost of any options you’ve chosen to add, plus the delivery charges. So never mind that you get a great deal with thousands knocked off the price of the car, the P11D stays the same!

So no, it’s not the same as the OTR price, which includes the Vehicle Excise Duty (‘road tax’) and the graduated First Registration Fee.

The P11D value is fixed for the life of the car, irrespective of any later price increases.

Why is the P11D value so important to company car drivers?

The reason is that the P11D value of the car is used to determine the amount of company car tax you will pay, in combination with the car’s CO2 emissions.

How? The level of CO2 emissions dictates the percentage of the P11D value of the car upon which you’ll be taxed – the ‘benefit in kind’ (check out the example below).

Generally speaking, the lower the P11D value, and the lower the CO2 emissions, the less company car tax is payable.

So how does this work in practice?

Let’s take my current business car as an example – the Audi Q7 3.0 TDI quattro S Line tiptronic.

  • P11D value: £53,300
  • CO2 emissions: 150g/km
  • Company car tax band 2017/17: 32%
  • Benefit in kind: 32% of £53,300 = £17,056
  • Company car tax payable 20%/40% of £17,056: £3,411/£6,822

That’s fairly straightforward.

Some options, like a mobile phone kit, are not counted as ‘extras’ so don’t get included in the P11D value

What if I add options? How does that affect the P11D value?

Again, let’s take my current business car and spec it up with some options to see how that affects the P11D.

    • Basic P11D value: £53,300
    • CO2 emissions: 150g/km
    • Company car tax band 2017/18: 32%
    • Option price: Panoramic glass sunroof £1,700, Audi side assist including Pre-sense rear and exit warning £750, Dynamic pack £2,655 and Parking assist pack £1,150
  • P11D value including options: £59,555
  • Benefit in kind: £19,057
  • Company car tax payable 20%/40%: £3,811/7,623

As you can see, the P11D increases and therefore so does the benefit in kind value of the company car – which means more company car tax is payable. In our example it’s hardly pernicious – £400 for a 20% tax payer, £801 for a 40% tax payer.

So when choosing options you always have to be aware how they can affect the P11D value and ultimately the amount of company car tax you pay.

It’s not all bad though! You might have to pay more company car tax but the car you are driving is more comfortable and more personalised to your tastes!

You don’t pay for all extras on the P11D!

You can, for example, add telephone or telephone wiring without paying any tax penalty as this is not a taxable item. This has no effect on the car’s P11D for company car tax purposes.

Most cars now, however, have Bluetooth or Apple Carplay for hands-free activation as standard so no installation is needed.

Did you find what you wanted?

Need to understand how company car tax works? Click here for Company car tax explained

Use our company car tax calculator to work out the tax on your next car

Find out more about company car tax in our special Company Car Tax page

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  1. If the car was bought second hand like mine for £18,000 but the P11D value is £32,000. Do you have to put the £32,000 down or the £18,000.

    If you are running the car as a company vehicle and it is owned by your company, then company car tax will be payable on the original P11D value of the car when it was first registered.
    Ralph Morton, editor


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