Company cars, whether sold through fleets or businesses, now account for a far greater share of new car sales than those to private individuals, and this percentage has only kept increasing in recent years., which are considerably cheaper to run as company cars. Though a company car is often a perk of a job, it’s by no means free as there’s a tax implication on it, which can prove significant depending on the car.
BIK tax rates change most years and the planned rates for future years are known well in advance. In the UK, company car tax is decided by a vehicle’s emissions, its value and your personal income tax rate. To calculate the company car tax, multiply the P11D value by the BIK percentage figure, and then multiply that figure by your personal tax band . This figure will give you the annual amount of BIK you need to pay, so divide it by 12 to see the monthly outgoing.
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