P11d / low salary, how is tax calculated

P11d / low salary, how is tax calculated

Didn't find your answer?

I have been running a small business for the last 15 years.  Up until last year my PAYE and dividends have meant I am a higher rate taxpayer.  One and a half years ago my first child was born and I subsequently decided to "downshift" which has meant my earnings have reduced significantly.  My total drawings from the company in the 2011/2012 tax year will end up being around £3,000 (and I have no other source of income... except my wife!)

I have a company car and have been paying benefit-in-kind on the car plus personal fuel, each year.  

My question is - will my liability arising from the P11d be reduced because I still have some of my personal tax allowance unused?  

I am trying to work out if I will be better off buying the car off the company (worth around £8k now) or continuing to keep it as a company car.  Many thanks for any advice.

Replies (1)

Please login or register to join the discussion.

avatar
By Chris Smail
01st Mar 2012 01:21

Yes

P11d benefit added to salary drawn so part will cover unused PA. but I would seriously question whether it was ever worth having the car inb the company.

Please get you accoumtant to run the car through one of the car comparison tools we have and check it.

If you have no accountant and have been DIYing I suspect you just wasted quite a bit of money, but very happy to be proved wrong.

Thanks (0)