What is a P11D value and how do you find it?

What is a P11D value?

P11D value indicates the value of a company car to HMRC. This value is used to calculate company car tax.

Please note: P11D value is sometimes confused with the P11D form. However, these two are completely different things – a P11D form is a document that businesses submit to HMRC each year to list any expenses or benefits given to directors or employees.

Understanding P11D value

A car’s P11D value includes its list price, VAT and any delivery charges – but excludes the registration fee and first year’s road tax.

Please note: A car’s P11D value is different from its ‘road price’, which covers everything necessary to get the car on the road – including the list price, registration, delivery fees – and the first year’s road tax.

How to calculate P11D

• A car’s P11D value is the manufacturer’s list price, which includes its delivery charges and VAT at the time of registration.

• The P11D value also includes the price of any factory options, such as chargeable trims or paintwork.

• P11D excludes any discounts, registration fees and annual road tax.

Here is a quick breakdown of how to calculate the P11D value of a car:

List price = £14,700 inc. VAT

Delivery fee = £650

Annual road tax = £145

First registration fee = £55

P11D value = £15,350 (vehicle list price + delivery price)

Road price = £15,999

Calculating company car tax using P11D value (with examples)

• Company car tax is calculated by multiplying your P11D value by the CO2 tax band percentage of the vehicle. This will give you your Benefit in Kind (BiK) tax amount.

• Finally, multiply this figure by your income tax rate percentage to get your company car tax amount.

Here is an example of a company car tax calculation with P11D value:

• The company car’s emissions are within the 80-84 g/km bracket (a 21% CO2-based tax band).

• Your salary is between £11,851 and £46,350 (which holds a 20% basic income tax rate).

• Your P11D value is £15,350.

You can work out what you’ll pay in company car tax with the following formulas:

P11D value x CO2-based tax band = BiK amount

£15,350.00 x 0.21 = £3,223.50

BiK amount x Income tax rate = Company car tax amount

£3,223.50 x 0.20 = £644.70

Here is another example of a company car tax calculation, this time for a car with a higher list price and CO2 tax band:

• The car has a P11D value of £35,000 and a CO2 emissions figure of 154g/km, placing it in the 35% banding.

• This would result in a BIK amount of £12,250.

• At a 20% income tax rate, your company car tax bill would be £2,450 annually (increasing to £4,900 at the 40% rate - and £5,512 at the highest 45% rate).

P11D value vs. On-the-Road price

A car’s P11D value is different to its On-the-Road (OtR) price. An OtR price includes all the costs needed to put the car on the road.

This typically includes the list price, registration and delivery fees, first-year road tax, and number plate printing. Therefore, due to all the extra costs included, a car’s OtR price will be higher than its P11D value.

Minimising company car tax

There are various ways to minimise your company car tax:

• Opting for a fully electric model will allow you to avoid road tax fees.

• Fully electric company cars are charged BiK tax at a rate of just 2% - the lowest rate currently available.

• Avoid choosing a diesel model. There is currently a 3% BiK surcharge for all diesel engine cars.

• The lower your car’s value, the less company car tax you’re likely to pay.

• When choosing a company car, it’s important to consider both the business’ priorities and tax efficiency.