Company Car Tax - BIK Calculator

A Benefit in Kind is a non-monetary benefit an employee receives from their employer as part of their compensation package – for instance, private use of a company vehicle.

The P11D value represents the combined value of all taxable benefits an employer offers their employees during a fiscal year. This includes things like company cars, health insurance, and other non-cash benefits. The P11D value helps determine the amount of income tax and National Insurance contributions an employee owes on these benefits.

In general, if you have a more expensive car with high CO2 emissions, you'll be liable to pay more tax. However, if your car is a low-emission or electric vehicle, you might be entitled to tax reductions or exemptions.

The fuel type of a company car significantly influences the amount of business vehicle tax an employee must pay. The UK's business vehicle tax system aims to stimulate the usage of low-emission or electric vehicles by providing tax reductions or exemptions for these types of cars. Hence, if your car is a low-emission or electric vehicle, you may be entitled to lower business vehicle tax rates or exemptions.

In the UK, business vehicle tax rates are related to income tax tiers, implying that a higher personal tax rate generally means a higher percentage of the car's value as benefit in kind tax. However, keep in mind that other factors like the car's value, CO2 emissions, and fuel type also influence the amount of tax you pay. Therefore, using a BIK tax calculator and consulting a tax expert are essential to accurately determine your tax based on your personal tax rate and other factors.

The tax is estimated as a percentage of the car's value, and the percentage is adjusted based on the car's emissions and fuel type. The employee's personal tax bracket is also considered in the tax calculation, and the tax is generally deducted from the employee's monthly salary. Use our estimator to gain insight into the varying BIK rates.

Yes, electric cars usually attract a lower business vehicle tax compared to conventional petrol or diesel cars. The UK's BIK tax system aims to promote the use of low-emission and electric vehicles by providing tax reductions or exemptions for these types of cars.

Yes, there are many examples of vehicles that still fall into the low CO2 range, like the self-charging hybrid vehicles from the likes of Nissan, Renault, and Toyota to name a few.