As well as Company Car BiK if you provide a fully fuelled vehicle to an employee or a director the employee or director will pay an additional BiK called Fuel Benefit Tax .
Vehicles that emit 0g/km of CO2 carry no Fuel Benefit Taxation.
As an example, if a hypothetical petrol car has a P11D value of £23,000 and emissions of 105g/km of CO2, it’s in the BiK liability band of 22% based on its CO2 emissions for 2018/2019. Therefore, the rateable figure is £5,060 – 22% of £23,000.
As an income tax payer and what tax band you are taxed at you will pay tax at 20% or 40%.
The 45% tax band only applies over £150,000 earnings per annum.
The amount of fuel benefit tax you’ll pay HMRC is this percentage of £5,060, so £1,012 or £2,024 a year spreading the cost over the year.
BiK bands are adjusted every financial year (this runs from 1 April to 31 March), and the figures will increase year-on-year until 2020 at least. The above calculations are based on the 2018/19 financial year. To penalise diesel drivers further from the 1 April 2018, diesel cars face a 5% higher BiK figure than petrol cars. In our example extra tax of £253 would be paid on top of the above figures. This does not apply to Hybrid vehicles.
There is no BiK for the self employed but it is likely your accountant will have agreed a private use percentage with HMRC as part of your tax return