If your company car (owned, leased or hired by the company) is available to you for personal use, then a benefit in kind arises and is taxed on your personally.
In order to work out the value of the benefit, you need to collate the following information:
o Find the price of the car – this is the list price when new and you should add any additional accessories if these weren’t included in the list price.
o If you have made a capital contribution to the car, this should be deducted from the list price.
o The list price is then multiplied by a percentage based on the car’s CO2 emissions or the range that the electric car can travel. There are separate schedule for cars registered before 6th April 2020 and after.
o Details are below:
- Company car benefit-in-kind tax rates for cars first registered before April 6, 2020
| % of P11D price | 2021/22 CO2 g/km/(electric mileage range) | 2022/23 CO2 g/km/(electric mileage range) |
| 0 | N/A | N/A |
| 1 | 0 | N/A |
| 2 | 1-50 (up to 130 miles | 0-50 (up to 130 miles |
| 5 | 1-50 (70-129 miles) | 1-50 (70-129 miles) |
| 8 | 1-50 (40-69 miles) | 1-50 (40-69 miles) |
| 12 | 1-50 (30-39 miles) | 1-50 (30-39 miles) |
| 14 | 1-50 (under 30 miles) | 1-50 (under 30 miles) |
| 15 | 51-54 | 51-54 |
| 16 | 55-59 | 55-59 |
| 17 | 60-64 | 60-64 |
| 18 | 65-69 | 65-69 |
| 19 | 70-74 | 70-74 |
| 20 | 75-79 | 75-79 |
| 21 | 80-84 | 80-84 |
| 22 | 85-89 | 85-89 |
| 23 | 90-94 | 90-94 |
| 24 | 95-99 | 95-99 |
| 25 | 100-104 | 100-104 |
| 26 | 105-109 | 105-109 |
| 27 | 110-114 | 110-114 |
| 28 | 115-119 | 115-119 |
| 29 | 120-124 | 120-124 |
| 30 | 125-129 | 125-129 |
| 31 | 130-134 | 130-134 |
| 32 | 135-139 | 135-139 |
| 33 | 140-144 | 140-144 |
| 34 | 145-149 | 145-149 |
| 35 | 150-154 | 150-154 |
| 36 | 155-159 | 155-159 |
| 37 | 160+ | 160+ |
- For each tax year add 4% for diesel cars up to a maximum of 37%. Cars that meet the Real Driving Emissions Step 2 (RDE2) standard are exempt.
Company car benefit-in-kind tax rates for cars first registered from April 6, 2020
| % of P11D price | 2021/22 CO2 g/km/(electric mileage range) | 2022/23 CO2 g/km/(electric mileage range) |
| 0 | N/A | N/A |
| 1 | 0-50 (up to 130 miles | N/A |
| 2 | N/A | 0-50 (up to 130 miles |
| 3 | N/A | N/A |
| 4 | 1-50 (70-129 miles) | N/A |
| 5 | N/A | 1-50 (70-129 miles) |
| 6 | N/A | N/A |
| 7 | 1-50 (40-69 miles) | N/A |
| 8 | N/A | 1-50 (40-69 miles) |
| 10 | N/A | N/A |
| 11 | 1-50 (30-39 miles) | N/A |
| 12 | N/A | 1-50 (30-39 miles) |
| 13 | 1-50 (under 30 miles) | N/A |
| 14 | 51-54 | 1-50 (under 30 miles) |
| 15 | 55-59 | 51-54 |
| 16 | 60-64 | 55-59 |
| 17 | 65-69 | 60-64 |
| 18 | 70-74 | 65-69 |
| 19 | 75-79 | 70-74 |
| 20 | 80-84 | 75-79 |
| 21 | 85-89 | 80-84 |
| 22 | 90-94 | 85-89 |
| 23 | 95-99 | 90-94 |
| 24 | 100-104 | 95-99 |
| 25 | 105-109 | 100-104 |
| 26 | 110-114 | 105-109 |
| 27 | 115-119 | 110-114 |
| 28 | 120-124 | 115-119 |
| 29 | 125-129 | 120-124 |
| 30 | 130-134 | 125-129 |
| 31 | 135-139 | 130-134 |
| 32 | 140-144 | 135-139 |
| 33 | 145-149 | 140-144 |
| 34 | 150-154 | 145-149 |
| 35 | 155-159 | 150-154 |
| 36 | 160-164 | 155-159 |
| 37 | 165+ | 160+ |
For each tax year add 4% for diesel cars up to a maximum of 37%. Cars that meet the Real Driving Emissions Step 2 (RDE2) standard are exempt.
o There may be further adjustments to this figure if the car was not available during the tax year.
Calculation example
A director has a company car with a list price of £38,639.
The car was registered after 6th April 2020, it’s CO2 emissions are 119 g/km.
If we look at the table for 2021/22 we will multiply the list price by 27% so the BIK is £10,432 if you had private use of the vehicle for the full tax year.
The benefit for 2022/23 would be 28% and therefore £10,818.
If the car is diesel, then there is a 4% supplement added – so the percentage applied would be 31%.
(The maximum percentage that can be applied to the list price is 37%.)
Therefore the director will pay personal tax on this amount, if he is higher rate tax payer, this will be £10,432 x 40% = £4,172.80.
The company will also pay Class 1A National Insurance of £10,432 x 13.8% = £1,439.61. For 2022/23, this would be £1,818 x 15.05% = £1,628.10.