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Business contract hire What is P11D Value?
  • Apr 26, 2021

  • 2 min read

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What is P11D Value?

The electric vehicle world is full of acronyms and phrases that many people have never heard of, which can make everything seem pretty daunting! At Octopus Electric Vehicles, we want to make it as simple as possible for people to understand the various terms associated with EVs, this time focusing on P11D.

What exactly is P11D value?

The P11D value is the list price of your car (including VAT) combined with any delivery charges, but does not include the car’s first registration fee or annual road tax.

What is P11D value used for?

Put simply, the P11D value of your car is used to calculate the amount of Benefit-in-Kind (BiK), aka company car tax, that you pay. Briefly, BiK is a tax band which is determined on the vehicle’s carbon dioxide emissions. For zero-emissions vehicles like EVs, this is just 2% at the moment. The Benefit in Kind (BiK) rate is set by the government. It’s worth noting this is currently fixed until April 2025 at 2%. After then, it'll increase by 1% each year until 2028. An increase in BiK would increase the amount you pay for your car.

How do you use this to calculate the amount of BIK you pay?

To calculate Benefit in Kind using the P11D value, all that needs to be done is to multiply the P11D value by the Benefit in Kind percentage. Once you've done this, you then multiply the BiK value by your income tax bracket (e.g. 20%).

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