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Cars and fuel

Before you create a new car record, ensure you have the following information:

• Car registration number
• Make and model
• Engine size
• The date the car was first registered
• The type of fuel or power used
• The car price list
• The date the car was first used
• CO2 emissions

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P46 (Car)

If there are any changes of circumstance in car benefit for an employee earning £8,500 a year or more, or for a director who uses the car for their own private use, a form P46 (Car) is required by HMRC. Complete and return it within 28 days of the quarter ending 5 July, 5 October, 5 January and 5 April. Form P46 (Car) is required when:

• You provide an employee or director with a first car, available for private use
• You provide an employee or director with an additional car, available for private use
• An employee whom you provide with a car becomes chargeable on benefits, either because they start earning at a rate of £8,500 or more per year, or become a director
• You withdraw, and don't replace, a car provided to an employee or director
• An employee's car is replaced

Using Sage 50 Payroll you can:

• Enter the required information and Print a P46(Car) For Transcription report
• Submit the P46(Car) report to HMRC
• Clear the P46 (Car) required flags if required

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Class 1A NIC

 NOTE: Look at the correct legislation table based on when your car was registered.

Class 1A NIC is the national insurance that an employer pays on expenses and benefits in kind provided to their employees. Expenses and benefits include company cars, medical insurance schemes, business travel, and so on.

Sage 50 Payroll can calculate the Class 1A NIC arising on company cars and fuel for you. However, Class 1A NICs aren't payable through the payroll system.

The following rules apply:

• Class 1A NI is payable one year in arrears
• After the end of each tax year, you must complete forms P11D and P11D(b) Employer's Declaration. These forms report to HMRC all the expenses and benefits provided to your employees

Important dates

• Submit forms P11D and P11D(b) Employer's Declaration to HMRC by 6 July each year, for the previous tax year
• HMRC must receive Class 1A NI payments by 19 July each year, for the previous tax year
• Pay payment of Class 1A NI on expenses and benefits by 19 July each year, for the previous tax year

 TIP: If you need to calculate the amount of Class 1A national insurance contributions (NIC) you're liable to pay, you can use our handy Calculate Class 1A NIC for cars and fuel guide. 

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Create a new car record

All cars registered from 1 January 1998 are required by law to be supplied with details of their CO2 emissions. Cars registered after 1 March 2001 have the CO2 emissions recorded on the Vehicle Registration Document (V5).

If you don't already have a record for the car, create a new car record.

 TIP: If you need to delete the car record, use our guide to delete car records. 

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Enter P46 (Car) information for a new car record

After you create a new car record, enter the P46 (Car) information for the new car.

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Keep a log of mileage

The mileage log isn't linked to Class 1A NIC calculations. It's simply an area for you to keep a mileage record.

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