Page 5 - Fleet
P. 5
Type Fuel Type P11D CO2 BIK% Monthly Tax Paid
Emissions Taxable BIK (20%/40%)
Car A RDE1 Diesel £25000 102 28% £583 £116/£232
Car B RDE2 Diesel £35000 115 27% £787 £157/£314
Car C Petrol/Electric Hybrid £50000 49 16% £666 £133/£266
It is crucial that colleagues fully understand the tax liability of the car that they order. They should not rely
on the taxation information supplied by the Fleet department, as this is subject to change at short notice.
They should conduct their own research including visiting the car manufacturers’ and HMRC websites and
use the calculation below to clarify the tax liability at the start of the lease.
(Car P11d value) x (BIK %) = annual BIK liability
Annual BIK liability x rate of taxation (20%, 40% or 45%) = Annual tax payable
Annual tax payable divided into 12 = monthly tax payable
Colleagues should also bear in mind that tax legislation changes frequently and the tax payable through the
lease can change.
4. Cash allowances and trade-downs
Colleagues eligible for a company car may choose to receive a cash allowance, instead of a company car.
Car allowances are paid as:
• a non-pensionable monthly addition to salary
• are liable to National Insurance and Income Tax
Eligible colleagues opting to receive the Cash Allowance will receive payment in their first available payroll,
and any payment will be pro-rated according to their start date in that month.
Non-company allocated vehicles
Colleagues who are in receipt of a car allowance must ensure that they possess a vehicle appropriate for
business use. Any vehicle must be less than 5 years old, maintained to a roadworthy standard and insured
for private and business use. The fleet department reserves the right to request an inspection of cars by
appointment during business hours.
Colleagues receiving cash allowance – Business Mileage
Business mileage will be reimbursed at current fuel only mileage rates, rather than the standard HMRC rate
for private car use.
In order to claim mileage, colleagues can either:
• Use the manual mileage claim form and submit to Accounts Payable once approved
• Use a company fuel card, log business mileage onto an online mileage portal and be deducted for
personal mileage only
Colleagues receiving cash allowance - Vehicle off Road
Pool cars, owned by HSS, or hire cars, booked using the HSS account, will not be available to those who are
in receipt of a car allowance.
Colleagues transferring from cash allowance to company vehicle
Colleagues who wish to switch from a cash allowance to a company car must obtain authorisation from an
appropriate Director. The company reserves the right to provide an unassigned vehicle from the fleet prior
to ordering a new vehicle.
Colleagues switching from company car to cash allowance
Colleagues with an allocated company car will not be permitted to switch to a car allowance until the end
of the car’s lease. An exception may be made where all vehicles involved can be reallocated to another
colleague at no cost to HSS.
Trade-downs (Grade C, D and E only)
Colleagues may elect to trade down/select a model in a lower grade to reduce their company car tax
liability. However, they will not receive the value of that saving in their salary.
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