Employees provided with electric cars should check they are taxed correctly

HMRC’s online forms P11D and P46(vehicle) have a bug that prevents it from always calculating electric car BiK accurately.

Check your tax code numbers if you have an employer-provided electric vehicle that is available for personal use to make sure HMRC has processed this benefit-in-kind correctly (BiK).

Employers must fill out Forms P11D to notify HMRC that they have given their employees BiK. Employers who have started or stopped giving employees access to cars should also file Form P46(car) periodically.

The acceptable CO2 emissions figure for reporting the benefit of a completely electric vehicle on a paper P11D form would be 0g/km. The letter “A” represents the kind of energy used.

Unfortunately, there have been reports of problems when utilising the online forms provided by HMRC to record an electric vehicle. The calculators used by HMRC by default assume that the vehicle is a high-CO2 petrol vehicle. As opposed to the 1% rate that is applied to electric cars for the tax year 2021–2022, this determines the annual BiK at 37% of the car’s list price.

It is the responsibility of the employee to ensure that their tax computations and code numbers appropriately represent the BiK (1 percent of the price in 2021–2022, and 2 percent of the price in 2022–2023).

Employers, their representatives, or employees must call HMRC in order to remedy the BiK charge.