Does BIK increase after the first year?

smjxm09

My son has a company car, as he is a service engineer. He has just noticed that his tax code has dropped for the next tax year due to the increase in his BIK.  Should the BIK remain the same on a company car once it has been assigned. 

Hoenir

If this current year wasn't a full tax year of availability. Then yes, proportionately there'll be a higher BIK to account for. 

TheSpectator

The charge is increasing pretty much across the board by 1% of list price next tax year

MetaPhysical

Yes, it will drop his tax code - i.e. make it worse - because the government increase the taxation on company cars with an escalator every year.

MetaPhysical

...to make it worse, even if a reassigned car that was valued at say £30k brand new is assigned to you when it is four years old, i.e. you are driving a car that is now worth only £12k, say, you still pay company car tax on its original £30k value.  This oft causes outrage at people who first get assigned a company car that was used by someone else first, i.e. new employees.

DullGreyGuy

smjxm09 said:

My son has a company car, as he is a service engineer. He has just noticed that his tax code has dropped for the next tax year due to the increase in his BIK.  Should the BIK remain the same on a company car once it has been assigned. 

No, the government frequently changes the rate. Its currently planned to go up one percentage point (eg from 15% to 16%) each year until 2028 and at that point there is a big jump for hybrids currently going from 8% to 18% the next year

Biddyman2

My company asked us to pick a company car based on a 3yr 90k miles. Looked into the BIK and increased from 6-7-8% which i was happy with. Car now ordered on a 4 year lease and ive been lumbered with the additional 10% hike in year 4.

silvercar

Electric cars have much lower BIK rates.

sheramber

Biddyman2 said:

My company asked us to pick a company car based on a 3yr 90k miles. Looked into the BIK and increased from 6-7-8% which i was happy with. Car now ordered on a 4 year lease and ive been lumbered with the additional 10% hike in year 4.

Not HMRC’s fault.

The order is not want you were offered.