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Guide to Business / Personal Vehicle Tax & Benefit in Kind

Company Vehicle Benefit in Kind (BIK)

Benefits in Kind (BIK) are benefits which directors or employees receive from employment which are not included in their salary or wages. Sometimes these are also called "perks" or "fringe benefits". A company car is seen as a major perk by the taxman: and as soon as you use it for a personal reason (including commuting), it is viewed as a taxable payment.

The below table illustrates rates for cars registered after 6th April 2020

CO2 (g/km) Electric Range (miles 2021-22 (%) 2022-23 (%)
0 N/A 1 2
1-50 >130 1 2
1-50 70-129 4 5
1-50 40-69 7 8
1-50 30-39 11 12
1-50 <30 13 14
51-54   14 15
55-59   15 16
60-64   16 17
65-69   17 18
70-74   18 19
75-79   19 20
80-84   20 21
85-89   21 22
90-94   22 23
95-99   23 24
100-104   24 25
105-109   25 26
110-114   26 27
115-119   27 28
120-124   28 29
125-129   29 30
130-134   30 31
135-139   31 32
140-144   32 33
145-149   33 34
150-154   34 35
155-159   35 36
160-164   36 37
165-169   37 37
170+   37 37

To calculate how much tax you'd have to pay on a company car please use the method below:

  • Get your car's P11D value: list price combined with VAT, delivery, cost options, & registration.
  • Multiply the P11D value by the vehicle's company car tax rate (illustrated in the table above) to get your Benefit in Kind amount.
  • Multiply your Benefit in Kind amount by your personal tax rate to get your company car tax payable.

Vehicle Excise Duty

Vehicle Excise Duty (VED) is an alternative term for Road Fund License (RFL), or Car Tax. This is built into your monthly rentals, so you don't need to worry.

Cars registered on or after 1st April 2017 will be subject to the following:

Alternative fuels include hybrids, bioethanol & liquid petroleum gas

Emissions (g/km of CO2) Petrol & RDE2 Standard Diesel Cars All Other Diesel Cars Alternative Fuel Cars
0 £0 £0 £0
1-50 £10 £25 £0
51-75 £25 £115 £25
76-90 £115 £140 £115
91-100 £140 £160 £140
101-110 £160 £180 £160
111-130 £180 £220 £180
131-150 £220 £555 £220
151-170 £555 £895 £555
171-190 £895 £1,335 £895
191-225 £1,335 £1,895 £1,345
226-255 £1,895 £2,245 £1,910
256+ £2,245 £2,245 £2,245

 

Rates for second year tax payments onwards:

Fuel Type Single 12 Month Payment
Petrol or Diesel £155
Electric £0
Alternative £150

 

Cars with a value of over £40,000 (including cost options, such as metallic paint) pay an annual £335 supplement for five years from the second time the vehicle is taxed.

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