BIK rates and company car tax

company car BIK rates 2020

Important update: BIK rates 2020-2023

In April 2020, the UK Government switched the CO2 figures used to calculate tax rates from the previous NEDC data set to WLTP. As such, there will be a change-over period where two different sets of BIK rates will be used - one for vehicles registered before 6th April 2020, and one for those registered after that date.

This change comes at the same time as a new set of BIK rates, prioritising electric cars. Pure-EVs are rated at 0% for FY 2020/21, as the UK Government aims to encourage drivers into electric cars. PHEVs recieve extremely low rates as before, but these are now graded based on the pure-electric range available. Those capable of travelling further on electric power, receive lower BIK rates.

Company car tax rates are designed to encourage company car drivers to choose cars with lower levels of CO2 and NOx emissions; incentives are offered both to the company and to the recipient of the vehicle to select low emission vehicles.

Under the current system, company and employee company car tax are both based on a percentage of the official value of the car (called the 'P11D'), the percentage being primarily determined by the car's CO2 emissions. For the employee, the Benefit-in-Kind (BIK) is then taxed at the appropriate personal tax rate - usually collected through PAYE.

Company car tax payable by an employee is based on the vehicle's P11D value multiplied by the appropriate BIK rate (determined by the car's CO2 and fuel type) and the employee's income tax rate (basic rate of 20%, higher rate of 40%, or additional rate of 45%).

Company car BIK rates 2020 - 2023

Current company car BIK rates start at 0% for pure-electric cars, 3% for new PHEV models, 21% for the greenest hybrids, and 23% for any car with 100 g/km CO2 or more. From 12%, bands rise in 1% increments to a maximum of 37%, with diesel models subject to a 4% supplement should they not meet RDE2 tests.

The table below shows how the percentage BIK rates vary with vehicle CO2 and electric-only range. It represents petrol-, diesel-, hybrid-, and electric-related BIK rates for 2020-2023. Note that the below table makes use of current WLTP-derived CO2 data, and for cars registered from April 2020. See seperate table for NEDC-derived CO2 BIK rates, for models registered before April 2020.

Company Car Tax BIK Rates April 2020 to March 2023
Table shows BIK rates for models registered from 6th April 2020, based on official WLTP CO2 figures.
Vehicle
CO2
(g/km)
Electric
range
(miles)
FY 2020-21
%BIK Rate
FY 2021-22
%BIK Rate
FY 2022-23
%BIK Rate
Petrol,
Electric,
RDE2
Diesel**
Non-
RDE2
Diesel**
Petrol,
Electric,
RDE2
Diesel**
Non-
RDE2
Diesel**
Petrol,
Electric,
RDE2
Diesel**
Non-
RDE2
Diesel**
0   0 1 2
1-50 130+ 0 1 2
1-50 70-129 3 4 5
1-50 40-69 6 7 8
1-50 30-39 10 11 12
1-50 <30 12 13 14
51-54   13 14 15
55-59   14 15 16
60-64   15 16 17
65-69   16 17 18
70-74   17 18 19
75-79   18 22 19 23 20 24
80-84   19 23 20 24 21 25
85-89   20 24 21 25 22 26
90-94   21 25 22 26 23 27
95-99   22 26 23 27 24 28
100-104   23 27 24 28 25 29
105-109   24 28 25 29 26 30
110-114   25 29 26 30 27 31
115-119   26 30 27 31 28 32
120-124   27 31 28 32 29 33
125-129   28 32 29 33 30 34
130-134   29 33 30 34 31 35
135-139   30 34 31 35 32 36
140-144   31 35 32 36 33 37
145-149   32 36 33 37 34 37
150-154   33 37 34 37 35 37
155-159   34 37 35 37 36 37
160-164   35 37 36 37 37 37
165-169   36 37 37 37 37 37
170+   37 37 37 37 37 37

** Rate applies to diesel vehicles not meeting the RDE2 standard. For diesel-hybrids, the Non-RDE2 4% diesel surcharge does not apply. All BIK rates will apply to cars registered from April 2020. Source: HMRC 2020.

4% supplement for non-RDE2 compliant diesels

HM Treasury levies a 4% diesel supplement over petrol models to account for greater levels of NOx emissions for the most current diesel cars. The supplement applies to diesel cars not compliant with the Real Driving Emissions Step 2 (RDE2) test, which confirms that real-world emissions are close to, or better than, the Euro 6 emissions standards for NOx.

NEDC Company car BIK rates 2020 - 2023

Company Car Tax BIK Rates April 2020 to March 2023
Table shows BIK rates for models registered before 6th April 2020, based on official NEDC CO2 figures.
Vehicle
CO2
(g/km)
Electric
range
(miles)
FY 2020-21
%BIK Rate
FY 2021-22
%BIK Rate
FY 2022-23
%BIK Rate
Petrol,
Electric,
RDE2
Diesel**
Non-
RDE2
Diesel**
Petrol,
Electric,
RDE2
Diesel**
Non-
RDE2
Diesel**
Petrol,
Electric,
RDE2
Diesel**
Non-
RDE2
Diesel**
0   0 1 2
1-50 130+ 2 2 2
1-50 70-129 5 5 5
1-50 40-69 8 8 8
1-50 30-39 12 12 12
1-50 <30 14 14 14
51-54   15 15 15
55-59   16 16 16
60-64   17 17 17
65-69   18 18 18
70-74   19 19 19
75   20 20 20
76-79   20 24 20 24 20 24
80-84   21 25 21 25 21 25
85-89   22 26 22 26 22 26
90-94   23 27 23 27 23 27
95-99   24 28 24 28 24 28
100-104   25 29 25 29 25 29
105-109   26 30 26 30 26 30
110-114   27 31 27 31 27 31
115-119   28 32 28 32 28 32
120-124   29 33 29 33 29 33
125-129   30 34 30 34 30 34
130-134   31 35 31 35 31 35
135-139   32 36 32 36 32 36
140-144   33 37 33 37 33 37
145-149   34 37 34 37 34 37
150-154   35 37 35 37 35 37
155-159   36 37 36 37 36 37
160+   37 37 37 37 37 37

** Rate applies to diesel vehicles not meeting the RDE2 standard. For diesel-hybrids, the Non-RDE2 4% diesel surcharge does not apply. All BIK rates apply to cars registered since 1998. Source: HMRC 2020.

Search for models by BIK rate here

Chris Lilly

Author:Chris Lilly
Date Updated:3rd Jul 2020

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