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The taxable benefit of having a company car, based on its CO2 emissions and P11D value.
Company car BIK is calculated using the car's P11D value (list price), its CO2 emissions (which determine the appropriate percentage), and the number of days it was available to you. Electric cars (0g/km CO2) have a 4% appropriate percentage for 2026/27, making them lower-tax than many higher-emission cars. The benefit value is added to your income and tax is collected through your tax code.
This definition is for informational purposes only and does not constitute tax, legal, or financial advice. Rules may change and outcomes depend on your circumstances.
These GOV.UK and HMRC sources provide the official context for this glossary entry. The definition is educational and does not determine your individual tax position.