If you use a company car for private travel, it's taxed as a Benefit in Kind (BIK). The tax rate depends on the car’s list price and CO2 emissions—low-emission vehicles get tax breaks. Use HMRC’s online tool to check and update your company car tax details.
If you are provided with a company car that has private use (including commuting), it is considered a "benefit in kind" (BIK) and is subject to taxation. This means that the employee or director using the car must pay tax on the value of the benefit they receive from the car’s private use.
The amount of tax payable is based on the car’s list price, including optional extras and VAT. It also takes into account the CO2 emissions of the car, as cars with lower emissions usually have a lower benefit-in-kind (BIK) tax rate. The more polluting the car, the higher the tax rate will be, and conversely electric and low-emission cars are taxed more favourably.
HMRC’s ‘Check or update your company car tax’ service can be used to:
- check your company car’s details
- tell HMRC about any changes to your car since 6 April
- update your fuel benefit, if your employer pays for fuel
In order to use this service, you will need to know:
- the car’s list price (including VAT and accessories)
- to check if your diesel car meets Euro 6d standard
- CO2 emissions information
- the zero emission mileage figure or ‘electric range’ – if your hybrid car has a CO2 emission figure of 1 to 50g/km
The service is not available if:
- you’re part of a car averaging or car sharing scheme
- your employer is managing benefits and expenses through the company payroll (known as ‘payrolling’)
- you want to make updates for a company commercial vehicle, such as a van
