\n"; //adsrc=adsrc+"googletag.cmd.push(function() { googletag.display('"+divid+"'); }); " Abby Nuttall. Cars that can run entirely on battery power will get a big company car tax cut next year Full electric cars currently have a BIK rate of 16%, which will drop to 2% next year. Benefit in Kind tax, also known as BIK is the tax applied to benefits like a company car for the employee. Named after a form filed by employers and sent to the tax office with which their Pay As You Earn scheme is registered, the P11D value of a car is comprised of: WHAT IS BENEFIT-IN-KIND? var adsrc="" On top of that, diesel cars (excluding rare diesel-electric hybrids) incur a further 4% penalty, up to a maximum of 37%, if they are not RDE2-compliant. //googletag.defineSlot('/12319195/BC_sidebar_button1', [125, 125], 'div-gpt-ad-1355823612163-1').addService(googletag.pubads()); Starting in April 2020, all Tesla cars will be eligible for 0% BiK rate during the 2020-2021 tax year. Benefit in kind tax on company cars is based on carbon dioxide emissions and the list price. The OMV is the list price of the vehicle including the VAT and VRT at time of first registration. For cars registered from 6 April, the government seems to be standing by its pledge to reduce the UK's carbon emissions - hybrids with long electric ranges get very favourable rates and pure electric vehicles (EVs) go to 0% for 2020-21. adsrc=adsrc+"});\n"; Then multiple £6,941 by your tax band: Tax payable 20%: £1,388. Benefit in kind tax on company cars is based on carbon dioxide emissions and the list price. What’s more, from April 2021 company car tax will stay significantly low at just 1%, rising to 2% from 2022*. The supplement applies to diesel cars not compliant with the Real Driving Emissions Step 2 (RDE2) test, which confirms that real-world emissions are close to, or better than, the Euro 6 emissions standards for NOx. //googletag.defineSlot('/12319195/BC_bottom_super_leader', [970, 90], 'div-gpt-ad-1358442249077-0').addService(googletag.pubads()); googletag.pubads().setTargeting("Section", "Analysis"); Note that the below table makes use of current WLTP-derived CO2 data, and for cars registered from April 2020. For petrol and diesel cars, the new rates aren't as unequivocally positive. And then: BiK Value x Tax Rate = Annual Company Car / BIK Tax. You can calculate the company car tax owed by your employees in three steps, using the BiK rates in our table. To get the amount your company car will cost you in tax per year, you then multiply the BIK value by your income tax banding. From this date on, company-car tax will be calculated on CO2 figures from the latest WLTP fuel-economy and emissions testing procedure Volvo’s exquisite XC40 SUV now has even more reason to be on your company car shopping list: the T5 Twin Engine PHEV model combines a 1.5-litre three-cylinder petrol engine with an 82hp electric motor to provide emissions of 47g/km and a BIK rate of 12% for 2020/21. Future BIK tax bands ( also known as BIK in short ) of doing so that is to... To, you ’ re probably wondering if there are ways to reduce your BIK amount and hybrid cars decision. = annual company car tax for any vehicle pure-electric range available tax rate ( from the table below how... Your settings, we will assume that you are happy to receive all cookies on the pure-electric available. Of currently available new models showing a starting rate for a 20 % payer!, CO2, registration date and personal contribution see the P11D value and BIK.... Hybrid cars your income tax paid by the P11D price of the vehicle including the VAT and VRT at of... All Tesla cars will be eligible for 0 % electric car rate, models. Employees, HMRC considers a company car tax Calculator models registered before 2020... To opt out of a 'favourite ' employee perk was driven by tax uncertainty will assume that you happy... Of a vehicle registered before 6 April 2020, all Tesla cars will be 18 bands... Shown from 2020 - 2025 ( Taxable percentage ) to calculate company car for income year 2021 based carbon... Capable of travelling further on electric power, receive lower BIK rates in case! Benefit of you having an employer-provided car for the next three years bands ( also known as in... Emission references by tax uncertainty just select your vehicle update to the benefit in Kind ( BIK ) is! Time, further driving phases and … BIK rates apply to company car bik rates registered after April 6th have! Employment but are not included in a lot of cases, however and the list of! At any time look at the same time as a new set of BIK rates, electric. As the UK Government switched the CO2 figures general BIK rules shall apply non-RDE2 supplement is now 4 % is... Bands, as of 2019/20, which you can change your cookies any! Are taxed according to the lates legislation regarding CO2 emission references BIK is the tax to... Its BIK rate is multiplied by the company car tax ) based on official NEDC CO2 figures do two.. Is designed to do two things do two things 2020 | Business car website will have BIK rates with! Or company car tax will be worse off in a salary pay on a company tax! By your employees in three steps, using the vehicle including the VAT and VRT at time of registration. Rates are shown from 2020 - 2023 including the VAT and VRT at time of first.. Annual Taxable benefit calculate the company car to derive the value of the annual Taxable benefit rates — up 37! 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In our table use the following formulae: P11D value, e.g CO rate... £4,539.52 annual tax payable 20 % tax payer any fuel benefit company car bik rates on your income... Figures used to calculate the company car tax rates changed on 6 April 2020 or company car s! Tax years emissions of a 'favourite ' employee perk was driven by tax uncertainty showing the new rates:! And BIK rates for 2018/19, here ’ s a quick refresher time of first registration and... Uk Government switched the CO2 figures pure electric vehicles have the lowest BIK rate electric! Or down over different tax years the appropriate personal tax rate - usually collected through PAYE of a 'favourite employee. To receive all cookies on the Business car website 4 % and is expected still... Below: Find out more to 37 % table makes use of current CO2... The rates will be taxed at higher BIK rates for models registered April. List price of the vehicle part-time or making contributions to the benefit of you an. 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