Shaun Farrelly

Thanks @HMRC Admin 25 , I think that answers my query. My Employer is not payrolling the company car, so it should be an adjustment to my Personal Allowance/Tax Code, not added to salary as well.

I have been having issues with my tax, and so I am trying to work out how a company car benefit in kind is calculated and have been told the following by HMRC: 1. Company Car Benefit In Kind is added to your salary for calculating tax; and 2. It is also deducted from my Personal Allowance, which is reflected in your tax code. Is this correct? If so, the overall effect seems to be multiplied? Surely only one or other should apply? As an example, see below: Scenario 1: Salary = £35,000, no company car. Personal Allowance = £12,570 (tax code of S1257L in Scotland) Taxable Income = £22,430 Tax = £4,486.00 (keeping it to basic 20% tax instead of Scottish tax) Scenario 2: Salary = £30,000 Company Car BIK = £5,000 BIK Total 'Income' = £35,000 Personal allowance = £7,570 (tax code of S757L in Scotland) Tax = £5,486.00. In each scenario, the total package is worth the same, but in Scenario 2, your tax burden is increased by £1,000. Is this correct?