Benefit-in-kind (BiK)

Keywords

What is benefit-in-kind (BiK) tax?

Benefit-in-kind (or BiK) is a tax on employees who receive perks from their job on top of their salary. So, if you have a company car that you also have for private use, you’ll have to pay a BiK tax contribution.

How much you pay will depend on the BiK tax band of your car. That is based on a number of factors, including CO2 emissions and the list price of the car (including any optional extras and VAT, but without the cost of the first-year registration fee and vehicle tax).

Related Jargon

What is a car's list price?

The list price of a new car is the recommended retail price. It is what buyers pay before various charges are added on that then add up to the on-the-road (OTR) price.

What is vehicle excise duty (VED)?

Commonly known as road tax or car tax, Vehicle Excise Duty (VED) is the annual tax that the owner of a vehicle has to pay to the government for it to be used (or parked) on public roads.

What are a car's CO2 emissions?

When petrol or diesel burns in an engine, carbon dioxide gas – also known as CO2 – is the result.

What is a car's on-the-road price?

A car’s on the road (OTR) price is the list price plus the extra costs that needed to get the car on the road.