Benefit in Kind Electric Cars 2021/22: Tax-Savvy Guide
Electric cars are becoming popular. Many people are choosing them. They are good for the environment. They help reduce pollution. In the UK, there is a special tax rule. This rule is called Benefit in Kind (BiK). This rule affects company cars. It is important to understand how it works.
What is Benefit in Kind?
Benefit in Kind is a tax rule. It applies to employees who get company cars. If you use a company car, it counts as a benefit. This means you pay tax on it. The amount you pay depends on the car’s value and its emissions.
Emissions are the gases that come from cars. They can harm the environment. Electric cars produce no emissions. This is one reason they are popular.
Why Choose Electric Cars?
Electric cars have many benefits. Here are some reasons to choose them:
- They are better for the environment.
- They save money on fuel.
- They often have lower running costs.
- They can be charged at home.
Many people like these benefits. They want to help the planet. They also want to save money.
BiK Rates for Electric Cars in 2021/22
The BiK rates for electric cars are low. In 2021/22, the rate is only 1%. This is good news for drivers. It means they pay less tax on their company car.
For example, let’s say your company car is worth £30,000. If the BiK rate is 1%, your taxable benefit is £300. This means you will pay tax on £300, not the full £30,000.
| Car Value | BiK Rate (1%) | Taxable Benefit |
|---|---|---|
| £20,000 | 1% | £200 |
| £30,000 | 1% | £300 |
| £40,000 | 1% | £400 |
Benefits of Low BiK Rates
Low BiK rates have many benefits. Here are some:
- Lower tax bills for employees.
- More people choose electric cars.
- Companies can save money.
- Better for the environment.
These benefits make electric cars a smart choice. They help both employees and companies.
Other Benefits of Electric Cars
Electric cars have more benefits. Here are some:
- They are quiet to drive.
- They have fewer moving parts.
- They need less maintenance.
- Many offer free charging points.
Drivers enjoy these features. They make driving easier and cheaper.
Charging Your Electric Car
Charging is an important part of owning an electric car. You can charge at home or at charging stations. Here are some options:
- Home charging: Install a charger at home.
- Work charging: Some companies offer charging stations.
- Public charging: Many places have charging points.
Charging is simple. Most electric cars can charge overnight. This means you start each day with a full battery.
Frequently Asked Questions
What Is Benefit In Kind For Electric Cars?
Benefit in Kind (BIK) is a tax on perks from your job. For electric cars, this means lower taxes.
How Is Bik Calculated For Electric Cars?
BIK for electric cars is based on their value and CO2 emissions. Lower emissions mean lower BIK rates.
What Are The Bik Rates For Electric Cars In 2021/22?
In 2021/22, BIK rates for electric cars start at 1%. This is a low rate compared to petrol and diesel cars.
Why Choose An Electric Car For Bik Benefits?
Electric cars offer lower BIK rates. This means you pay less tax compared to traditional cars.
Conclusion
Benefit in Kind electric cars are a good choice. They help the environment. They also save money on taxes. The low BiK rate of 1% makes them even better.
People are choosing electric cars more each year. Companies are also getting involved. They see the benefits for their employees. Everyone wins with electric cars.
As we move forward, more options will be available. Electric cars will continue to improve. They will become a normal part of our lives.
So, if you are thinking about a new car, consider an electric one. With low BiK rates and many benefits, it is a smart choice.
