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.
Petrol powered and hybrid powered cars for the tax year 2024 to 2025
| CO2 emissions (grams per km) | Electric mileage range | NEDC % | WLTP % |
|---|---|---|---|
| 0 | N/A | 2 | 2 |
| 1 to 50 | 130 and above | 2 | 2 |
| 1 to 50 | 70 to 129 | 5 | 5 |
| 1 to 50 | 40 to 69 | 8 | 8 |
| 1 to 50 | 30 to 39 | 12 | 12 |
| 1 to 50 | less than 30 | 14 | 14 |
| 51 to 54 | – | 15 | 15 |
| 55 to 59 | – | 16 | 16 |
| 60 to 64 | – | 17 | 17 |
| 65 to 69 | – | 18 | 18 |
| 70 – 74 | – | 19 | 19 |
| 75 to 79 | – | 20 | 20 |
| 80 to 84 | – | 21 | 21 |
| 85 to 90 | – | 22 | 22 |
| 90 to 94 | – | 23 | 23 |
| 95 to 99 | – | 24 | 24 |
| 100 to 104 | – | 25 | 25 |
| 105 to 109 | – | 26 | 26 |
| 110 to 114 | – | 27 | 27 |
| 115 to 119 | – | 28 | 28 |
| 120 to 124 | – | 29 | 29 |
| 125 to 129 | – | 30 | 30 |
| 130 to 134 | – | 31 | 31 |
| 135 to 139 | – | 32 | 32 |
| 140 to 144 | – | 33 | 33 |
| 145 – 149 | – | 34 | 34 |
| 150 to 154 | – | 35 | 35 |
| 155 to 159 | – | 36 | 36 |
| 160 to 164 | – | 37 | 37 |
| 165 to 169 | – | 37 | 37 |
| 170 and above | – |
- 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.
- 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.
Its CO2 emissions are 119 g/km.
If we look at the table for 2024/25 we will multiply the list price by 28% so the BIK is £10,818 if you had private use of the vehicle for the full tax year.
If the car is diesel, then there is a 4% supplement added – so the percentage applied would be 32%. (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 £10,818 x 40% = £4,327.20.
The company will also pay Class 1A National Insurance of £10,818 x 13.8% = £1,492.88.