Benefit in Kind (BIK)

Benefit in Kind (BIK) tax is a tax that company car drivers pay when they have a car that is paid for by the company for business and personal use.

How to calculate my company car tax (BIK)

Company car tax (BIK) is payable by an employee and is based on the vehicle's P11D value, multiplied by the appropriate BIK rate (determined by the car's CO2 and fuel type) and the employee's income tax rate (basic rate of 20%, higher rate of 40% or additional rate of 45%).

For example a car with a P11d value of £30,000, CO2 emission of 100g/km (24%) and a UK tax payer on 20% would be:
£30,000 x 24% x 20% = £1440 per year
Divide this by 12 to give you your monthly figure of £120 per month

The P11d value of the vehicle is the price of the vehicle including all extras.

The tables below shows the current and future BIK tax bands (also known as company car tax) based on CO2 emissions of your vehicle.

Plug In Electric vehicles (PHEV) have a battery only range and this can differ from vehicle to vehicle.
Providing the car is under 50 g/km you then work out the mileage they run on battery only to determine your tax band.

Co2 Emissions G/Km	Electric range miles	2024- 2025 % rate	2025- 2026 % rate	2026- 2027 % rate	2027- 2028 % rate
0	N/a	2	3	4	5
1-50	>130	2	3	4	5
1-50	70-129	5	6	7	8
1-50	40-69	8	9	10	11
1-50	30-39	12	13	14	15
1-50	<30	14	15	16	17
51-54		15	16	17	18
55-59		16	17	18	19
60-64		17	18	19	20
65-69		18	19	20	21
70-74		19	20	21	21
75-79		20	21	21	21
80-84		21	22	22	22
85-89		22	23	23	23
90-94		23	24	24	24
95-99		24	25	25	25
100-104		25	26	26	26
105-109		26	27	27	27
110-114		27	28	28	28
115-119		28	29	29	29
120-124		29	30	30	30
125-129		30	31	31	31
130-134		31	32	32	32
135-140		32	33	33	33
140-144		33	34	34	34
145-149		34	35	35	35
150-154		35	36	36	36
155-159		36	37	37	37
160-164		37	37	37	37
165-169		37	37	37	37
170+		37	37	37	37

Vehicle Excess duty (VED)

Vehicle Road Fund License or Vehicle Excess duty (VED) as its officially know affects all vehicle drivers and is compulsory to have. Depending when your car was registered will depend on what you pay.

Cars registered on or after 1/4/17 will be charged the standard rate as below.

Tax Class	12 m VED cost
Petrol/ Diesel cars	£190
Alternative fuel	£180
Electric Vehicles	£0

Alternative fuel vehicles include hybrids, bioethanol and liquid petroleum gas.

Vehicles with a list price of more than £40,000

If your car or motorhome list price (when new) is more than £40,000 You will have to pay an extra £410 a year

You do not have to pay this if you have a zero emission vehicle.

The list price is the published price of the vehicle before it’s registered for the first time. It’s the price before any discounts are applied.

Any extras are included, so a car could have a new value of £39895. If you purchase an extra for £106. The new cost of the car will be £40,001 therefore you will may the additions VED.

You only have to pay this rate for 5 years (from the second time the vehicle is taxed).

Cost of VED for cars over £40,000

Tax Class	12 m VED cost
Petrol/ Diesel cars	£600
Alternative fuel	£590
Electric Vehicles	£0

First tax payment when you register a vehicle

When you first register a vehicle from new you pay a rate based on the vehicles CO2 emissions.

Cost of new vehicle first year.

CO2 emissions g/km	cars Diesel (RDE2) and Petrol	Alternative fuels
0	£0	£0
1-50	£10	£0
51-75	£30	£20
76-90	£135	£125
91-100	£175	£165
101-110	£195	£185
111-130	£220	£210
131-159	£270	£260
151-170	£680	£670
171-190	£1095	£1085
191-225	£1650	£1640
226-255	£2340	£2330
255 +	£2745	£2735

This payment covers your vehicle for 12 months.

Lease Vehicles

When leasing a vehicle the VED and the first registration fee is included within the rental of the vehicle.

You may notice a small increase in the rental cost each year to reflect the cost of the increase in VED.