UK Company Car Tax Explained - What is Benefit in Kind?

UK Company Car Tax Explained. In this video we explore UK Company Car tax, we look at how to calculate your company car tax, tax on fuel, and why you should do your homework before you sign up to a company car scheme, especially before you take on a fully expensed company car. What is Benefit in Kind (BiK) and what does it mean to your take-home pay?

Government Company Car Tax Calculator is at: http://cccfcalculator.hmrc.gov.uk/CCF0.aspx

Benefit in Kind is calculated by taking the car’s P11D value (list price + optional extras + VAT & delivery) and multiplying it by the BIK % (which is based on CO2 emissions and fuel type).

At the moment the most tax-efficient company cars are pure electric vehicles (EV's) such as Tesla's as the benefit in kind on these is currently 1% for the tax year 2021/2022. This will increase to 2% next year, however, the BIK on these vehicles will remain comparatively low vs Petrol or Diesel cars and will also outperform most PHEV's in the tax department.

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