Company Car Tax: Who Qualifies and What You Get
Learn how company car taxation works, how your vehicle's emissions affect your costs, and why electric vehicles may save you money.
If your employer provides you with a vehicle for personal use, you may need to pay tax on that benefit. This is known as a Benefit-in-Kind (BIK) tax.
Who it's for
This scheme applies to employees who are provided with a company vehicle that they are allowed to use for non-work purposes.
What you get
You receive the benefit of having a car available for your personal use, which is treated as a form of non-cash income provided by your employer.
What it costs you
The amount you pay is determined by the vehicle's CO2 emissions. Generally, the higher the emissions produced by the car, the more tax you will have to pay.
The catch to know
The tax rates vary significantly depending on the type of vehicle you drive; for example, electric vehicles typically have much lower BIK rates than petrol or diesel cars.
How to apply
- Check your employment contract to confirm your vehicle benefit details.
- Review your tax code to see how the benefit is being applied.
- Consult your employer's payroll department for specific details regarding your vehicle.
- Visit the official portal for more information: https://www.gov.uk/company-car-tax