I'm not from UK, so this scheme is not very clear to me... This works only for some categories, say electric cars lease? Otherwise, employer can also rent employee flat and/or pay, for example sake - Mary's mortgage directly. Ah, i can see know - some categories have tax exemptions... but why for employers only?
Hi Vyacheslav, thank you for your comment. Correct it is tax efficient for certain non-cash benefits such as electric cars, childcare, pensions etc. Its a benefit to both employees and their employers. Employees benefit from a company car when they wouldn't usually have one; and employers can improve their ESG policy as well as motivate those employees. Hope this helps!
It’s 2% BIK on an electric car. The amount you pay depends on your personal band eg 20% or 40%. For example A Tesla model 3 RWD is around £200/ year for a 20% tax payer, an equivalent sized petrol or diesel would be roughly 10x that.
Thanks for explaining this so clearly. Does private medical insurance get taxed as a benefit in kind?
Great video! How do you know so much?
Too kind Tom! Thanks
I'm not from UK, so this scheme is not very clear to me... This works only for some categories, say electric cars lease?
Otherwise, employer can also rent employee flat and/or pay, for example sake - Mary's mortgage directly.
Ah, i can see know - some categories have tax exemptions... but why for employers only?
Hi Vyacheslav, thank you for your comment. Correct it is tax efficient for certain non-cash benefits such as electric cars, childcare, pensions etc. Its a benefit to both employees and their employers. Employees benefit from a company car when they wouldn't usually have one; and employers can improve their ESG policy as well as motivate those employees. Hope this helps!
Hi can this also reduce student finance repayment?
I don't think so Anees. Salary sacrifice is usualy used for employee benefits but do double check the government website to make sure.
So how much is the BIK tax for an electric car? Will I get another tax on post-tax salary (eg more tax on 22,008 pounds)?
It’s 2% BIK on an electric car. The amount you pay depends on your personal band eg 20% or 40%. For example A Tesla model 3 RWD is around £200/ year for a 20% tax payer, an equivalent sized petrol or diesel would be roughly
10x that.