If you provide any employee with a company car, this is a benefit in kind. When your employee starts using the car, submit a P46 (Car) form to HMRC. They then calculate the liability due. If you payroll the car liability via a Benefit in Kind, don't submit a P46 (Car).
Use Sage 50 Payroll to create car records and submit P46 (Car) forms.
Before you start
If you payroll employee car benefits, add the car details to the employee record but don't submit a P46 (Car).
This is because the Full Payment Submission (FPS) includes car details. Find out more in our payrolling benefits - the basics article.
NOTE: If you payroll a car, create a Benefit in Kind (BIK) pay element in Sage 50 Payroll. This calculates the tax due on the notional amount of the benefit.
If you don't payroll benefits and an employee has a company car, submit the car details on a P46 (Car).
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
P46 (Car)
Submit a form P46 (Car) to HMRC when an employee who earns £8,500 a year or more changes the circumstance of their car benefit. Or for a director who uses the car for private use. Complete and return it within 28 days of the quarter ending 5 July, 5 October, 5 January and 5 April. Submit a Form P46 (Car) 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 you provide a car to becomes chargeable on benefits. Either because they start to earn 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
In Sage 50 Payroll you can:
Class 1A NIC
NOTE: Look at the correct legislation table, based on when you registered the car.
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, etc.
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, complete forms P11D and P11D (b) Employer's Declaration. These forms report all expenses and benefits provided to your employees, to HMRC
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: To calculate the amount of Class 1A NIC to pay, use our Calculate Class 1A NIC for cars and fuel article.
Create a new car record
If you don't already have a record for the car, follow our article to create a new car record.
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.
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.
Replace an existing car
From 6 April 2023, HMRC re-introduced the requirement to submit a P46(Car) submission when you replace an employee's car. Use our guide to replace an existing company car and make the submission.
Withdraw a car
If you want to withdraw a car from payroll, use our guide to withdraw a company car.
Delete a car record
If you need to delete the car record, follow our article to delete car records.
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