BIK is a percentage of that taxable value based on your income tax rate. England, Wales and Northern Ireland have three tiers (20%, 40% and 45%), while Scotland has a five-tier system between 19% and 46%. So a driver paying 20% income tax would be liable for 20% of the taxable value each year, typically split into 12 monthly instalments and collected from their monthly wages.
What incentives are available for businesses to use hybrids?
With strong incentives and no range anxiety, hybrids (particularly PHEVs) have been a popular first step towards electrification for company car drivers. However, they can also benefit fleet operators.
Employers pay Class 1A National Insurance Contributions (NICs) for providing workplace perks. For cars, this is a flat rate of 13.8% (rising to 15.05% in April 2022) of the vehicle’s taxable value, which means it’s just as heavily CO2-weighted as BIK tax for drivers. Some examples are shown below.