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Benefit-in-Kind explained

To calculate your personal liability for Benefit-in-Kind tax for the current tax year, please click on the link below.

To calculate which vehicles fall within your monthly budget for Benefit-in-Kind tax, please click on the link below.

To calculate your annual expenditure on fuel for your chosen new Vauxhall, please click on the link below.

Car BiK
Car BiK Example
Fuel BiK
Fuel BiK Example
Bands

Car Benefit-in-Kind

If you have the use of a company-owned car for your own private use (and that includes commuting to and from work) then you will be taxed on this ‘benefit’.

The deciding factors on how much tax you pay are the value of the car, its CO2 emissions (the lower these two figures, the less it will cost you) and whether it has a petrol or diesel engine.

Note that the value of the car is not what it actually cost, but the manufacturer’s recommended On-The-Road cost at the time of purchase – less the Vehicle Excise Duty and First Registration Fee. This is known as its P11D value.

The car’s CO2 emissions figure and fuel type are used to decide the percentage of that P11D value on which you will pay tax, click here to view the BiK Bands.

The resulting figure is the Car Benefit Charge. You then pay 20%, 40% or 50% (45% from April 2013) tax on this sum, according to your income tax rate.

Car Benefit-in-Kind Example

Example: Diesel powered car with OTR of £18,000 and CO2 emissions of 110g/km (2012/2013 tax year).

On-The-Road	£18,000.00
Higher rate (40%) tax payer	£1180.16
Deduct: VED (£0) and First Registration Fee (£55)
Effective list price	£17,945.00
Add: Optional metallic paint (£495)
List price for tax purposes (P11D value)	£18,440.00
% of P11D value to be taxed for 110g/km diesel	16%
Car benefit charge (P11D value x 16%)	£2950.40
Benefit-in-Kind tax liability
Basic rate (20%) tax payer	£590.08

Fuel Benefit-in-Kind

If your employer provides you with free fuel for private use (which includes driving to and from work), then this is also a taxable benefit.

This is calculated in a similar way to the Car Benefit, except that instead of taking a percentage of the P11D value of the car, the percentage is applied to a flat rate charge of £20,200 (tax year 2012/2013). The BiK Calculator provided will show you the tax due if you select ‘Yes’ to the question ‘Does your employer pay for private use of fuel?’ and whether this will save you money based on your annual personal mileage.

Fuel Benefit-in-Kind Example

Diesel powered car with OTR of £18,000 and emissions of 110g/km (2012/2013 tax year)

Fuel Benefit flat-rate value	£20,200.00
Tax to be paid (40% tax payer)	£1292.80
Fuel Benefit Charge (at 16%)	£3232.00
Tax to be paid (20% tax payer)	£646.40

Note that the figure of £20,200 is used irrespective of the number of private miles you travel.

Benefit-in-Kind Company Car Taxation Bands

The table below shows the percentage of the car’s price to be taxed based on CO2 emissions in grammes per kilometre.

CO2 emissions in grammes per kilometre	Percentage of car's price to be taxed (Tax year 2012/2013)		Percentage of car's price to be taxed (Tax year 2013/2014)
220 and above	35	35	35	35
	Petrol/Hybrid	Diesel	Petrol/Hybrid	Diesel
0	0	0	0	0
1-75	5	8	5	8
76-94	10	13	10	13
95-99	10	13	11	14
100-104	11	14	12	15
105-109	12	15	13	16
110-114	13	16	14	17
115-119	14	17	15	18
120-124	15	18	16	19
125-129	16	19	17	20
130-134	17	20	18	21
135-139	18	21	19	22
140-144	19	22	20	23
145-149	20	23	21	24
150-154	21	24	22	25
155-159	22	25	23	26
160-164	23	26	24	27
165-169	24	27	25	28
170-174	25	28	26	29
175-179	26	29	27	30
180-184	27	30	28	31
185-189	28	31	29	32
190-194	29	32	30	33
195-199	30	33	31	34
200-204	31	34	32	35
205-209	32	35	33	35
210-214	33	35	34	35
215-219	34	35	35	35

Special rules apply to cars with ultra-low emissions, a reduced appropriate percentage of 5% applies, from 6 April 2010 for five years, for company cars with an approved CO2 emissions figure not exceeding 75g/km.