Company car tax

If you have a company car, you’ll have to pay tax on it called Benefit-In-Kind (BIK). The amount of tax you’ll pay depends on your earnings, the cost of the car and the amount of CO2 the car produces.

Considerations

So how does this all work?

From April 2002 a graduated system of tax was introduced that uses a vehicles CO2 emissions to determine the amount of company car tax an individual pays on a company supplied vehicle. A vehicle's CO2 emission level determines the percentage of the vehicle’s P11D value (List Price) that can be taxed. This means that vehicles with lower CO2 emissions will incur a lower tax liability. This is only applicable to passenger cars, Light Commercial Vehicles (LCV’s) work on a different calculation using a fixed value of £3,430 multiplied by the individuals tax rate.

Monthly £ amount paid by end user (2019-2020 tax year)***

Select a vehicle below to view its BIK rates

How does Company Car Tax work?

For passenger cars Company Car tax (or BIK tax) is calculated using the CO2 emissions figure each vehicle outputs. Your vehicles emission figure will fall into a BIK band which is associated with a percentage. This percentage is applied to the P11D value (list price) of your vehicle, giving you a maximum taxable amount. Your individual tax rate is then applied to the maximum taxable amount to give you the BIK tax you pay on your vehicle per year.

Visit Gov.uk for more information on Company Car Tax bands.

For Diesel vehicles that do not qualify for the new RDE2 certification, an additional 4% is added to the BIK % up to 37%

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