Benefit-in-kind (BIK) for electric cars | Smart Home Charge | Smart Home Charge

What is a BIK rate and how does it affect me?

11th Dec 2019 Danny Morgan


Benefit-in-kind rates are a tax applied to company cars. This guide explains all you need to know about BIK rates, how they are decided and how it affects you and your company car.

 

What is a BIK tax?

A Benefit-In-Kind Rate (or BIK) is essentially a tax that applies to benefits or other perks an employee receives from the employer.

 

Does the BIK rate apply to my car?

If you have a company car that you use privately, then a BIK tax or contribution is applicable.

The BIK tax rates are based on CO2 emissions, the list price including extras and VAT but excluding the first-year registration fee and vehicle tax.

Cars with higher CO2 emissions tend to have a higher BIK Rate, while those with lower emissions generally have a lower rate.  

 

Is the benefit-in-kind tax lower for electric cars and plug-in hybrids?

The BIK tax depends on your vehicle and the rates tend to change each tax year. Electric cars and plug-in hybrids have a more favourable BIK rate because of their zero or low CO2 emissions.

The Government is planning to reduce the benefit-in-kind tax rate even further for low-emission vehicles from April 2020 onwards.

 

What are the 2019 benefit-in-kind car tax bands?

CO2 (g/km) 2019-20 (%)
0-50 16
51-75 19
76-94 22
95-99 23
100-104 24
105-109 25
110-114 26
115-119 27
120-124 28
125-129 29
130-134 30
135-139 31
140-144 32
145-149 33
150-154 34
155-159 35
160-164 36
165+ 37

 

What are the new BIK rates from April 2020 onwards?

CO2 (g/km) Electric range (miles) 2020-21 (%) 2021-22 (%) 2022-23 (%)
0 n/a 0 1 2
1-50 Greater than 130 2 2 2
1-50 70-129 5 5 5
1-50 40-69 8 8 8
1-50 30-39 12 12 12
1-50 Less than 30 14 14 14
51-54   15 15 15
55-59   16 16 16
60-64   17 17 17
65-69   18 18 18
70-74   19 19 19
75-79   20 20 20
80-84   21 21 21
85-89   22 22 22
90-94   23 23 23
95-99   24 24 24
100-104   25 25 25
105-109   26 26 26
110-114   27 27 27


How do I calculate the benefit-in-kind tax for my electric or plug-in hybrid car?

You can do this in two ways. You can refer to the tables above and calculate the cost. You will need to know your vehicle’s:

  • P11D value (list price including extra and VAT but without first-year registration and vehicle tax)
  • Your vehicle’s CO2 emissions
  • Your vehicle’s electric range (for April 2020 onwards only)

To calculate the tax, multiply the P11D value by the relevant BIK percentage.

Or you can use this calculator tool: https://www.fleetnews.co.uk/cars/car-tax-calculator/

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