We have had queries regarding Benefit In Kind (BIK) on vehicles provided by the employer during the period of the COVID-19 restrictions.

The guidance is as follows:


Where an employee is in receipt of a vehicle (car or van) provided by his or her employer, the following may apply:


(a) Employer Takes Back Possession of the Vehicle

Where an employer takes back possession of the vehicle and an employee has no access to the vehicle, no BIK shall apply for the period


(b) Employer Prohibits Use

Where an employee retains possession of a vehicle, but the employer prohibits the use of the vehicle, no BIK shall apply if the vehicle is not used for private use. Records should be maintained to show that the employer has prohibited its use and no such use has occurred, for example communication from employer, photographic evidence of odometer etc. 


(c) Employer Allows Private Use

Where an employee has a car provided by his or her employer and the circumstances in the previous example don’t apply, limited or reduced business mileage (if any) is undertaken during the period of the COVID-19 crisis, and

  • personal use is limited the amount of business mileage traveled in January 2020 may be used as a base month for the purposes of calculating the amount of BIK due.  Thus, the percentage applied in the calculation of the cash equivalent, which is based on annualised business mileage, may have regard to the actual business mileage for January 2020, for the period of the COVID-19 restrictions. Appropriate records should be kept, for example business mileage traveled in January, amount of private use, photographic evidence of odometer etc. 


Employee Continues Working

Where an employee continues to undertake business travel as usual in an employer-provided vehicle, the usual BIK rules will apply.

Further information on the taxation of employer-provided vehicles is available in the Tax and Duty Manual Part 05-04-02, Benefit-in-Kind, Private use of Employer-Provided Vehicle

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