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How do I calculate my company car (BIK) tax?

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Every car has a Benefit-in-Kind [BIK] percentage band.

This percentage band formula is based on CO2 emissions, and a P11D value, which is the list price, including extras and VAT, but without the first year registration fee and vehicle tax.

To calculate the company car - or BIK - tax, we multiply the P11D value by the BIK percentage banding, then multiply that figure by your tax band - i.e. 20%, 40% or 45%.

For the tax year 2020/21 the income tax bands are:

Basic Rate tax payers – up to £50,000 – 20%
Higher Rate tax payers – £50,001 to £150,000 – 40%
Additional Rate tax payers – Over £150,000 – 45%

The above includes the personal allowance and applies for England, Wales and Northern Ireland.

Visit the HMRC Website for more information on tax bands

Useful links relating to this topic.

What is BIK (benefit in kind) car tax?
What are the current benefit-in-kind (BIK) company car tax bands?

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Regal Garage (Bromsgrove) Ltd trading as Regal Autolease are a credit broker and not a lender, we are authorised and regulated by the Financial Conduct Authority. Registered No : 787993

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