WVW Worx

Main Menu

  • Volkswagen News
  • Volkswagen Emissions
  • Volkswagen credit
  • Volkswagen Electric
  • Banking

WVW Worx

Header Banner

WVW Worx

  • Volkswagen News
  • Volkswagen Emissions
  • Volkswagen credit
  • Volkswagen Electric
  • Banking
Volkswagen Emissions
Home›Volkswagen Emissions›Company car tax scale 2022/2023: Everything you need to know

Company car tax scale 2022/2023: Everything you need to know

By Raymond J. Nowicki
April 14, 2022
0
0

If you take your car’s P11D value, multiply it by its BIK rate and multiply the resulting number by your income tax margin – for example £20,000 x 25% x 20% – you get your annual BIK tax charge, which in this case is £ is 1000.

Calculation of BIK Tax rate for diesel vehicles

Diesel cars are now largely frowned upon by the environmental lobby’s darling, which means that emissions tests have become tougher for them. The latest – mandatory for all new diesel vehicles sold from January 2021 – is called Real Driving Emissions Step 2 (RDE2).

Diesel engines registered before this date that are not RDE2 compliant (some achieved RDE2 compliance early so check with your supplier) incur a 4% surcharge on their published BIK rate, up to 37% . Keep that in mind when considering a used diesel as a company car. To be clear, all new diesels are RDE2 compliant, which means the 4% surcharge does not apply.

Diesel-electric hybrids are classed as alternatively powered vehicles, so avoid paying a premium whether they’re RDE2 compliant or not.

Calculation of the BIK rate for electric cars

Zero CO2 emissions ensure electric cars enjoy the lowest BIK rate. In 2020/21 it was even 0%; but in 2021/22 it rose to 1%; and from 2022/23 it will be 2% until the end of the 2024/25 tax year. In any case, EV drivers pay much less company car tax than others.

Calculation of the BIK rate for hybrid and plug-in hybrid vehicles

Due to their low CO2 emissions, hybrid and plug-in hybrid (PHEV) cars enjoy the next lower BIK rates. However, since their emissions are tied to being able to run on battery power only, their BIK rates are calculated using a combination of CO2 emissions and official all-electric range.

There are five BIK tariff levels for hybrids. Cars with an electric-only range of more than 130 miles will be taxed at a 2% tax rate in tax year 2022/23 (although no such hybrid exists yet). On the other hand, those with less than 30 miles of electric range (many of them) fall in the 14% band.

Related posts:

  1. Bank of England targets greener corporate bond portfolio
  2. New Ford company to build 2 electric vehicle battery factories
  3. Lamborghini splurges $ 2.4 billion to electrify its supercars
  4. These car nameplates may be abandoned

Recent Posts

  • Volkswagen creates enthusiasm – The Irish News
  • A look back at the 1981 Volkswagen Passat
  • Volkswagen has already sold out electric cars in key markets this year
  • Volkswagen Group CEO: Transition to electric vehicles cannot yet be accelerated
  • 9 Stunningly Beautiful Cars Collectors Don’t Want

Archives

  • May 2022
  • April 2022
  • March 2022
  • February 2022
  • January 2022
  • December 2021
  • November 2021
  • October 2021
  • September 2021
  • August 2021
  • July 2021
  • June 2021
  • May 2021
  • March 2021

Categories

  • Banking
  • Volkswagen credit
  • Volkswagen Electric
  • Volkswagen Emissions
  • Volkswagen News
  • Terms and Conditions
  • Privacy Policy