Tax on company car - Am I missign something

dakotadveils

Good morning everyone,

Just a quick question for anyone who has a company car as I'm a little confused.
I understand that the BIK value is added to your normal salary to give a gross income so yuo pay the relevant tax, but the same BIK value has been deducted from my tax code. Surely it has to be one or the other or am I missing something. If it's both surely I am paying more tax over not only with the BIK value added to my salary, but also due to a reduced tax code. Thank you

Note added - I have noticed I am missing a spellcheck in the header!!!!

TadleyBaggie

The BIK is not added to your salary during the year though, so reducing the tax code is the only way to collect the correct tax.

On the HMRC annual tax summary it will appear as though it has been added, but when the calculation for tax is made the full tax code is used. So it amounts to the same thing and tax is only paid once.

dakotadveils

Thank you!!

That has cleared up the confusion. Its odd as my tax coding shows it added to my total income, as well as a reduction in my tax free allowance

sheramber

dakotadveils wrote: »

Thank you!!

That has cleared up the confusion. Its odd as my tax coding shows it added to my total income, as well as a reduction in my tax free allowance

Can you copy your tax code calculation here?

ceivegz

If you complete your own SA tax return though you would have to add the BIK to your salary. I'm guessing that this isn't the case though.