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.