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How to Check Company Car Tax

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How to Check Company Car Tax

Being offered a company car is often recognised as one of the best possible perks at a job. However, what might seem like an entirely free bonus can come with unexpected costs in the form of taxes.

While having a company car, is a great job benefit, there are tax implications that you must be aware of, as driving any car without tax is illegal. If you’re caught driving an untaxed company car, you could find yourself facing fines, points on your licence or even being disqualified from driving.

Knowing how much tax you have to pay is integral to understanding the real cost of your company car. In this article, we’ll take you through how to check car tax using our company car tax calculator. We’ll also explore how choosing an electric car may help you to keep your car tax as low as possible.

Kia dealer with customer looking at ev6

How does company car tax work?

Company car tax is a type of Benefit in Kind (BIK) tax. This is levied on any ‘perks’ you receive from your employer that can be used outside of work purposes.

Company car tax is calculated using a few different variables:
1. Your tax banding (e.g. 20% or 40% depending on your annual income).
2. The value of your car.
3. The carbon emissions the car releases. Cars are split into different brackets based on their CO2 emissions, with higher emissions leading to a higher BIK rate.

The most effective way to keep your company car tax low is by driving a low or zero-emission car. Pure electric cars have the lowest company car tax rates, as their BIK is only 2% until 2025. In comparison, the BIK for diesel company cars can reach up to 37%.

Electric cars make great company cars because of the various financial advantages they offer. As well as reducing your BIK rate, EVs are also currently exempt from the London Congestion Charge and other clean air zone charges in other cities across the UK. If you’re frequently driving in Central London, having an electric company car could save you £15 daily. This Congestion Charge exemption for EVs is ending in 2025, so there’s no better time to go electric and capitalise on the savings.

Kia EV9 front view in blue

How to check car tax

Knowing how much car tax you pay is important to understand the real cost of ownership of your car. If you drive a company car, knowing your company car tax rates may be important in deciding whether the perk is really worth the benefits.

To calculate BIK value, you must take the percentage determined by the emission bracket your vehicle sits in and then multiply it by the recommended retail price (RRP) value of your car.

Luckily, we have a company car tax calculator that can do all this for you. Simply visit the page and select your Kia model and fuel type to find out how much tax you should be paying on your Kia.

Kia dealer handing keys over to customer in dealership

Do I need insurance to tax my car?

Yes, in order to tax a car you must have valid insurance. Car insurance is a legal requirement, as it’s designed to provide financial protection for drivers in the event of an accident.

Driving without insurance can incur severe consequences, such as a fixed fine of £300 or 6 points on your licence. If the case goes to court, this could even result in an unlimited fine or you having your car taken away.

Kia niro EV charging with model sitting on car

Can I tax a car without MOT?

You need a valid MOT certificate to tax your car – one that will still be valid by the start date of your car tax. Having a valid MOT is also a legal requirement in general for UK drivers, as it certifies that your car is safe and roadworthy.

Taxing a vehicle requires both MOT and insurance.

Kia niro EV charging with model sitting on car

Go electric for your next company car

Unfortunately, having to pay car tax is a reality for all drivers. Even so, this ongoing running cost is often forgotten. Car tax is a legal requirement, so understanding how it’s calculated and how much you must pay is essential for understanding the real cost of ownership of your vehicle. This is particularly important for company car company car drivers, who are often so excited about the perk that they overlook the potential costs.

When you drive a Kia, you can always be certain of how much car tax you’re paying, simply by using our company car tax calculator to check.

If you’ve checked your company car tax and are ready to start saving, make the switch to electric now and start enjoying the rewarding benefits of zero-emission driving. EVs benefit from various electric car grants and incentives, including the current Congestion Charge exemption and reduced BIK rates, among other electric car tax benefits.

Step into the future when you explore our exciting range of electric cars and electric fleet car solutions today.

Niro EV6 charging point

Images shown are for illustration purposes only and may not be to full UK specification. Features shown are not standard across the Kia model range and availability will vary dependant on model. For further details please refer to the individual model specification sheets.