When calculating the P11D value of a new car, we exclude the 1st Registration Fee and VED. However, on this new vehicle, we have 1 year Tyre cover, 3 Years GAP cover and Paint Seal and Protect. I would say to exclude these from the P11D value however I can find nowhere confirming this (and HMRC are taking over 1 hour to answer the phone!)
I would be grateful if you could confirm if you exclude these elements from your P11D car cost computations?
Thanks
Replies (6)
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Capital/revenue
The tyre cover and GAP insurance are not part of the capital cost of the car so exclude them.
The paint seal and protect is part of the cost of the car. I hope you don't live to regret the paint seal and protect. Modern water based paints need to breathe and sealing the surface can actually damage the paint. (not tax advice I know).
Is VED not the new name for Road Fund Licence, not car tax?
Perhaps someone could clarify this for us?
VED is vehicle excise duty and is indeed usually known as road tax or road fund licence. As it relates to the use of the public highway and not the cost of the car it is a revenue expense and not part of the cost of the car.
Car tax - abolished
There was once a "car tax" that was charged on a brand new car (but not on used cars).
Here's two 1990 examples from an official price list:
Citroen 2CV
Basic Price £ 3,181.00
Car Tax £ 265.08
VAT £ 516.91
Total : £ 3,962.99
Citroen XM
Basic Price £ 11,634.00
Car tax £ 969.50
VAT £ 1,890.53
Total : £ 14,494.03
From the above it will be seen that VAT at 15% was charged on the car + car tax and car tax equated to 8.33% of basic price.
My recollection is that car tax at one time was 10% and got reduced to 5% before being abolished.