The ICAEW has issued a warning over potential inaccuracies in the Benefit In Kind (BIK) charge as calculated by HMRC's online P11D and P46(car) forms. HMRC calculators are incorrectly allocating high CO2 emissions and issuing charges that are higher than the correct figures.

The Institute of Chartered Accountants in England and Wales (ICAEW) has outlined the current problems with the car forms.

  • Where an employee receives a Company Car with private use, form P11D must be completed annually and a P46(car) must be completed on a quarterly basis (if the BIK is not Payrolled).
  • If completing a paper version of a P11D for an Electric Car, it would have 0% emissions and be classed as fuel category 'A'.
  • Due to issues with the system for 2021-22, the online HMRC form is instead defaulting to a high CO2 emission level, similar to a petrol car and the BIK calculation is using 37% instead of a Rate of 1%.

Employees are urged to check their calculations and ensure that their PAYE code reflects the correct BIK charge.

If anything is incorrect, either the employee, employer, or their agent can call HMRC to have it amended. The telephone number is 0300 200 3200 and the PAYE scheme or account office reference will be needed.

Useful guides on this topic

CO2 emissions: Ultra-low emission cars from 2019-20
CO2 emissions bands and percentages that apply from 2019-20 to 2022-23.

Company cars
Company car tax. How do you work out the car benefit? How do you work out car fuel benefit? Are there savings for low-emissions vehicles? How do you reduce car benefit? Cars and the tax tribunals and Top Tax Tips.

Electric Vehicles: Update 2022
With the increased recent focus on climate change and the government’s plan to ban new petrol and diesel car sales by 2030, we provide an update of the tax issues businesses and their employees should consider when acquiring or providing an electric vehicle.

External links

Employees provided with electric cars should check they are taxed correctly

HMRC: Employers: general enquiries

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