BIK Rate Changes for April 2020
If you have access to a company car which you use for private use, you have to pay Benefit In Kind tax- this is calculated based on the cars retail price, its emissions and your tax bracket.
In April 2020, the government are changing BIK tax for zero emission cars, the change is making zero emission cars have absolutely £0 in BIK tax.
Just for a quick comparison, if you took an brand new, average 2.0l diesel engine with an 130g/km emission this would put you in the 32% BIK bracket.
If the car costs around £30,500 you would then times this with the BIK percentage of 32%- which would be £9,760.
To then get the amount your company car will cost you in a tax year, you then multiply the BIK value by your tax income
Say your tax bracket is 20%, you would then times £9,760 with 20%= £1,952
This would work out to around £163 a month out of your monthly paycheck. If you had a zero emissions car you would pay absolutely nothing, therefore that's £163 a month you would be able to save!