Benefit-in-Kind (BiK) is a tax applied to company cars used for private purposes. HMRC treats it as additional income. The BiK rate is influenced by the car’s CO₂ emissions, encouraging low-emission vehicles.
To calculate BiK tax:

• Start with the car’s non-cash benefit (P11D) value
• Subtract any personal contribution
• Find the BiK rate (based on CO₂ emissions)
• Multiply the non-cash benefit (P11D) value by the BiK rate (officially known as the appropriate percentage) to obtain the BiK taxable value
• Multiply the BiK taxable value by the driver’s highest income tax rate

This process helps determine how much tax the driver will owe.

Electric vehicles attract lower Benefit-in-Kind (BIK) tax rates compared to traditional internal combustion engine (ICE) vehicles

 Some EVs also qualify for the UK’s Plug-in Vehicle Grant, and companies can claim 100% first-year allowances on electric cars, providing further tax relief.

TCO, or whole life cost, represents the full cost of owning or leasing a vehicle, beyond its purchase price. Key factors include:

• Purchase price (or lease) minus resale value
• Fuel, maintenance, insurance, VED and any ULEZ charges
• Any finance costs
• Class 1A National Insurance (for cars available for private use)

By consolidating these, TCO allows fleet managers to make informed comparisons between vehicles, including Electric Vehicles (EVs) which may have higher upfront costs but potentially lower running expenses.

A P11D form is currently used by employers to report non-cash benefits to HMRC, including company cars. The P11D value of a car is crucial for calculating the tax owed by employees.
To calculate P11D value:

1. Use the car’s on-the-road price
2. Subtract first-year VED and registration fee
3. Add the value of any extras (e.g. navigation systems, larger wheels)

This value, combined with CO₂ emissions, determines the employee’s tax liability.

Please note that as of the 24 GOV budget, currently planned to phased out by April 2026.

Leasing offers several benefits for fleet operators. Leasing vehicles means lower upfront costs, no concerns about depreciation, and flexibility to update your fleet more frequently. Lease payments are typically tax-deductible, and it can be easier to budget as maintenance is often included in contracts. Purchasing provides full ownership, which may be advantageous if you intend to keep vehicles long-term, but it involves higher upfront capital, higher maintenance responsibilities, and depreciation costs.

For more information on funding for fleets visit our Business Vehicle Finance Page - https://www.nissan.co.uk/fleet-car-solutions/business-fleet-management/car-finance.html

CO₂ emissions influence many aspects of fleet management, from company car tax to city congestion charges and clean air zones. Vehicles with lower emissions benefit from reduced taxes and other incentives, such as writing down allowances and grants.

The Worldwide Harmonised Light Vehicle Test Procedure (WLTP) is the current standard for testing vehicle emissions and fuel economy, replacing the New European Driving Cycle (NEDC). WLTP provides more realistic testing conditions, reflecting real-world driving scenarios, making it more accurate in calculating CO₂ emissions and fuel consumption.

Electric vehicles (EVs) can qualify for government incentives such as the Plug-in Vehicle Grant and lower Benefit-in-Kind (BIK) tax rates. Some UK cities offer congestion charge exemptions for EVs. Additionally, using EVs might be part of your company’s sustainability objectives.

For more insight into how EVs can benefit your fleet along with the electrification options offered by Nissan visit https://www.nissan.co.uk/experience-nissan/electric-vehicles.html

When switching to a hybrid or electric fleet, consider the availability of charging infrastructure, both at your facilities and on drivers’ routes. Assess vehicle range, charging times, and the overall cost of ownership, including potential tax incentives, maintenance savings, and fuel reductions. It's also important to train drivers on operating EVs and hybrids to ensure your fleet is future-proofed.

To understand Nissan’s range of electrification options view our Electrified Vehicles page here https://www.nissan.co.uk/experience-nissan/electric-vehicles.html

You can reduce fuel costs by encouraging fuel-efficient driving practices, such as using smoother acceleration and engaging eco mode. Introducing telematics systems helps monitor fuel consumption and driver behaviour. Switching to electric or hybrid vehicles, regular vehicle maintenance (like tyre checks), and route optimisation software can also help cut fuel expenses.

You can manage fleet maintenance through regular servicing schedules, proactive vehicle inspections, and using fleet management software to track maintenance needs. Opting for full-service leasing contracts can include maintenance, removing the burden of organising repairs. Regular maintenance prevents costly breakdowns, extends vehicle lifespan, and ensures compliance with UK road safety standards.

For more information on what to expect when you choose us to handle your maintenance and repair take a look at our Repair & Maintenance page https://www.nissan.co.uk/owners/car-repair.html

Choosing the right vehicle depends on the specific needs of your fleet, such as the types of journeys, load requirements, and fuel efficiency. Consider factors like running costs, payload capacity, CO₂ emissions, and whether you need electric or hybrid options. Government incentives for low-emission vehicles may influence your decision, as can future-proofing against ULEZ (Ultra-Low Emission Zone) regulations.

View the full Nissan fleet range here https://www.nissan.co.uk/fleet-car-solutions/nissan-company-cars.html

Grey Fleet refers to employees using their own cars for business purposes. Employers are still responsible for ensuring that these vehicles are roadworthy, insured, and meet legal standards. Duty of care also requires employers to monitor mileage and ensure drivers adhere to safety protocols.

Companies need to ensure Grey Fleet drivers:

• Have a valid driving licence
• Maintain insurance and vehicle roadworthiness
• Follow health and safety regulations

Effective management of Grey Fleet can reduce risks and operational challenges.

Pool cars are vehicles that are shared among employees for work purposes, rather than being allocated to specific drivers. They can reduce fleet size and costs by optimising vehicle usage. Pool cars help lower Benefit-in-Kind tax liabilities since they’re used strictly for business and not for personal use. They’re ideal for organisations where employees only occasionally need to use a vehicle.