Benefit in kind tax or company car tax as it is sometimes known is based upon the P11D value of the car and the driver is liable to pay tax on a percentage of the P11D dependant on the co2 emissions of the car.
Benefit in kind tax is designed to reflect the benefit of having access to a vehicle for private use and secondly, to encourage drivers to choose more environmentally-friendly cars because the tax charged is directly related to the carbon dioxide level a car produces.
Benefit in kind co2 emissions
With the focus moving more towards environmentally friendly cars in recent years, benefit in kind tax is an incentive for company car drivers to select a car with lower co2 emissions to not only be placed in a lower tax band but also to help lower co2 emissions and help the environment.
For more on co2 emissions and to compare car co2 emissions, come to the Fleet News co2 section.