Benefit-in-kind (or BIK) is a tax on employees who receive benefits or perks on top of their salary.
And James Milne Chartered Accountants can help you understand everything that is involved.
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If you have an employer-provided car for private use, you will have to pay a BIK contribution, both on the car and fuel, if also provided.
Every car has a BIK value, calculated using the relevant percentage of the original list price, according to its CO2 emissions banding.
That is the list price, including extras and VAT, but without the first-year registration fee and vehicle tax.
Current company car BIK rates start at:
- 2% for electric cars
- 22% for the greenest hybrids
- 25% for any car with 100 g/km CO2#
From 14%, bands rise in 1% increments to a maximum of 37%, with diesel models subject to a 4% supplement should they not meet RDE2 tests.
The fuel benefit charge is calculated by multiplying the fuel benefit charge multiplier by the car’s appropriate percentage; that is, the CO2 emissions derived rate used to calculate the car benefit charge.
Please visit the James Milne Chartered Accountants Resource Centre for more detailed information on BIK.