• Company Car Tax Bands Explained

Company Car Tax Bands Explained

Everything you need to know about Benefit-In-Kind (BIK) car tax

If you’re a business that provides company cars for employees' private use too, then you’ll need to understand what tax is required to pay on the vehicle.

The world of Benefit-In-Kind (BIK) company car tax can be a complicated one, so we’ve tackled the subject head-on to help you make sense of it all... 

What is Benefit-In-Kind (BIK) company car tax?

If you use a company car for private purposes - including the commute to and from work - you’ll have to pay excess tax on that vehicle. To work out the cost, factors considered include; your salary, list price of the car (also referred to as the P11D) and fuel usage.

Benefit-In-Kind company car tax - also known as BIK - is applicable to employees who receive additional benefits or perks on top of their basic annual salary. A BIK contribution is required if you have a company car for private use. These are categorised into varying percentage rates, depending on your car’s emissions and when it was first registered.

How does the BIK company car tax system work?

Percentage rates for company cars are determined by three things:

  1. The tax bracket of your annual salary.
  2. The list price of your car (P11D).
  3. The car’s emissions.

Of course with any tax system, the BIK company car tax rates are subject to change with each financial year. In April 2020, the UK Government announced that CO2 figures used to calculate tax rates would be determined by World Harmonised Light Vehicle Test Procedure (WLTP) data going forwards.

From this, two separate sets of BIK rates are now used; one for vehicles registered before 6th April 2020 and another for cars first registered after 6th April 2020, which we’ve displayed in two tables below.

Unsure of how much you will need to pay? ​​Estimate the tax payable on employees' company cars, by using the HMRC calculator on the official HM Revenue & Customs website

Are electric vehicles exempt from BIK company car tax?  

During the financial year 2020/2021, electric vehicles were exempt so there was no BIK company car tax to pay at all at this time. For the 2021/2022 financial year however, this has changed.  

If you drive an electric company car registered after 6th April 2020, you will pay 1% BIK tax during the financial year 2021/2022. This will increase to 2% during the 2022/2023 financial year. 

The above rates also apply to hybrid vehicles with emissions from 1-50g/km, or an electric range of over 130 miles per charge. The current rates are in place to encourage drivers to choose company cars with lower levels of CO2 and NOx emissions.

What are the BIK company car tax rates for 2021 to 2024?

The UK government has announced BIK company car tax rates up until 2024 to help businesses across the country plan ahead. The tax bands have been determined by the amount of CO2 emissions, the range of miles per charge, and the Real Driving Emissions 2 for diesel cars (known as RDE2). 

Take a look at the tables below to find out how the rates in place from April 2021 to March 2024 will affect you... 

BIK company car rates for vehicles registered after 6th April 2020:  

Vehicle CO2 emissions (g/km)

Electric range (miles)

BIK rate % (electric, petrol, RDE2 diesel) 2021-2022

BIK rate % (non-RDE2 diesel) 2021-2022

BIK rate % (electric, petrol, RDE2 diesel) 2022-2023

BIK rate % (non-RDE2 diesel) 2022-2023

BIK rate % (electric, petrol, RDE2 diesel) 2023-2024

BIK rate % (non-RDE2 diesel) 2023-2024

0

 

1

 

2

 

2

 

1-50

130+

1

 

2

 

2

 

1-50

70-129

4

 

5

 

5

 

1-50

40-69

7

 

8

 

8

 

1-50

30-39

11

 

12

 

12

 

1-50

1-30

13

 

14

 

14

 

51-54

 

14

 

15

 

15

 

55-59

 

15

 

16

 

16

 

60-64

 

16

 

17

 

17

 

65-69

 

17

 

18

 

18

 

70-74

 

18

 

19

 

19

 

75-79

 

19

23

20

24

20

24

80-84

 

20

24

21

25

21

25

85-89

 

21

25

22

26

22

26

90-94

 

22

26

23

27

23

27

95-99

 

23

27

24

28

24

28

100-104

 

24

28

25

29

25

29

105-109

 

25

29

26

30

26

30

110-114

 

26

30

27

31

27

31

115-119

 

27

31

28

32

28

32

120-124

 

28

32

29

33

29

33

125-129

 

29

33

30

34

30

34

130-134

 

30

34

31

35

31

35

135-139

 

31

35

32

36

32

36

140-144

 

32

36

33

37

33

37

145-149

 

33

37

34

37

34

37

150-154

 

34

37

35

37

35

37

155-159

 

35

37

36

37

36

37

160-164

 

36

37

37

37

37

37

165-169

 

37

37

37

37

37

37

170+

 

37

37

37

37

37

37  

BIK company car rates for vehicles registered before 6th April 2020:

Vehicle CO2 emissions (g/km)

Electric range (miles)

BIK rate % (electric, petrol, RDE2 diesel) 2021-2022

BIK rate % (non-RDE2 diesel) 2021-2022

BIK rate % (electric, petrol, RDE2 diesel) 2022-2023

BIK rate % (non-RDE2 diesel) 2022-2023

BIK rate % (electric, petrol, RDE2 diesel) 2023-2024

BIK rate % (non-RDE2 diesel) 2023-2024

0

 

1

 

2

 

2

 

1-50

130+

2

 

2

 

2

 

1-50

70-129

5

 

5

 

5

 

1-50

40-69

8

 

8

 

8

 

1-50

30-39

12

 

12

 

12

 

1-50

1-30

14

 

14

 

14

 

51-54

 

15

 

15

 

15

 

55-59

 

16

 

16

 

16

 

60-64

 

17

 

17

 

17

 

65-69

 

18

 

18

 

18

 

70-74

 

19

 

19

 

19

 

75-79

 

20

24

20

24

20

24

80-84

 

21

25

21

25

21

25

85-89

 

22

26

22

26

22

26

90-94

 

23

27

23

27

23

27

95-99

 

24

28

24

28

24

28

100-104

 

25

29

25

29

25

29

105-109

 

26

30

26

30

26

30

110-114

 

27

31

27

31

27

31

115-119

 

28

32

28

32

28

32

120-124

 

29

33

29

33

29

33

125-129

 

30

34

30

34

30

34

130-134

 

31

35

31

35

31

35

135-139

 

32

36

32

36

32

36

140-144

 

33

37

33

37

33

37

145-149

 

34

37

34

37

34

37

150-154

 

35

37

35

37

35

37

155-159

 

36

37

36

37

36

37

160+

 

37

37

37

37

37

37

Think electric, choose Wilsons

Here at Wilsons Epsom we love electric cars! We’re proud to be electric vehicle experts, so accelerate your journey into EV ownership by exploring our huge range of electric, hybrid, and plug-in hybrid cars.

As the largest family-run new and used car supermarket in the South of England, we offer customers an electrifying choice of vehicles at unbeatable value and a service they can trust. 

If you’re looking for an electric vehicle to benefit from a better BIK company car tax rate, then we can help. With plenty of EV offers available, visit our Surrey-based showroom to discover our range of electric vehicles in more detail.

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All our vehicles are subject to an Admin Fee. Our Admin Fee covers any additional administration needed during your transaction, including a thorough provenance check (HPI Check). The vehicle provenance investigation checks if a car has finance owing, is stolen, cloned, written off or clocked, giving you real confidence in your car. Our vehicle checks carried out during preparation also include a cosmetic and mechanical assessment of each vehicle. The admin fee also includes the cost to fully valet, register and, if necessary, MOT your vehicle (if less than 6 months left of current MOT).

Our administration fee is a variable fee which covers the additional administration needed when transacting with different categories of customers as specified:

All of the above fees are inclusive of VAT