EV Company Car Tax - Understanding deduction

[Tomo1971]

Higher rate Scottish Tax payer.

P11D value of Car £47,728

HMRC Site has the below on my account:

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Estimated tax on your Company car benefit
How much tax you pay depends on your total income (your income plus the taxable benefit value).

Estimated tax on your Company car benefit

Taxable benefit value Basic rate (20%) taxpayer Higher rate (40%) taxpayer Additional rate (45%) taxpayer
£954 £190.80 £381.60 £429.30

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I am seeing a deduction of £79.50 per month on my payslip (£954/12) - I expected to see £31.80 (£381.60/12) - am I interpretting this wrong - First company car, moved from a low ball car allowance!

Thanks for any help!

[Puzzles]

That’s the bik value which is currently 2%

Which they might show as taxable earnings or similar

[Tomo1971]

Puzzles said:

That’s the bik value which is currently 2%

Which they might show as taxable earnings or similar

So what should I be paying - £79.50 or the £31.80 ?

[Puzzles]

I’d have expected to see you pay around the £31.80 in tax.

Although it depends on what the agreement with your employer says, if they are deducting the BIK value then you have no benefit to be taxed.

Might be quicker to talk to your employer, sometimes payslips don’t make a lot of sense.

[Road2Ruin]

Tomo1971 said:

Puzzles said:

That’s the bik value which is currently 2%

Which they might show as taxable earnings or similar

So what should I be paying - £79.50 or the £31.80 ?

No idea of the Scottish tax things differently, but a 2% BIK would be £79.50 x .4 = £31.80. But you would see the £79.50 added to your income. Maybe you are reading the payslip wrong.

[MustangGT]

Road2Ruin said:

No idea of the Scottish tax things differently, but a 2% BIK would be £79.50 x .4 = £31.80. But you would see the £79.50 added to your income. Maybe you are reading the payslip wrong.

It could be added as a BIK equivalent to create the correct taxable value of income, then it would also be deducted as a separate line because you will not actually be paid it. This might be what the OP is seeing? Question would be, how much less in net pay is the OP seeing since before the car? Another question is how much more tax is being deducted, it should be the marginal rate (40%) x £79.50 = £31.80 more than the previous pre-car month.

So gross pay lets say £5000 in the month, add the £79.50 BIK to get a taxable pay of £5,079.50. To get net pay you would then need to deduct the £79.50 from the calculated net pay again. Otherwise you would be being paid the BIK as well as receiving the car.

[Electronicpants]

https://comcar.co.uk/companycar/tax/select/?redire...

[Sheepshanks]

It should all come out in the wash when the annual tax calculation is done, but it would be good for the OP to check with his payroll department so he understands how it works.

It's not impossible that they've messed up - we've seen a couple of examples on here is recent weeks (but not related to cars).

[Tomo1971]

Thanks all, ill reach out to HR - all company car tax calculators indicate the lower amount and cant remember seeing any addition to the pay to offset it.

[Tomo1971]

HR have confirmed that the payslip is misleading but are only taking the lower amount from the salary.