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BiK Rates Company Car Tax

Scottish company car drivers to be hit by higher BiK rates

Company car drivers who are resident in Scotland will be hit by larger increases in Benefit-in-Kind rates from 6 April, as new income tax rates are implemented.

From 6 April, Scotland will implement a five band BiK structure

From 6 April, Scotland will implement a five band BiK structure

Set to add to the fleet administration burden, the new rates – which come into effect as BiK rates rise in the UK – will bring a new five-band structure compared with the three-band regime that remains in effect in England, Northern Ireland and Wales.

In Scotland, the basic rate band now splits into three – starter, basic and intermediate – to which is added the higher rate band and the top rate band. Applicable income tax rates are: 19%, 20%, 21%, 41% and 46%.

The new system means that middle income – those earning £24,001 and above – and top earners face a 1% rise in income tax versus employees in the rest of the UK. Income tax rates for the remainder of the UK are: 20%, 40% and 45% depending on earnings.

The move means that the majority of company car drivers living in Scotland will face larger increases in Benefit-in-Kind tax, with only a small number of employees on lower salaries expected to escape the double hit of the income tax rise and BiK rise.

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Natalie Middleton

Natalie has worked as a fleet journalist for nearly 20 years, previously as assistant editor on the former Company Car magazine before joining Fleet World in 2006. Prior to this, she worked on a range of B2B titles, including Insurance Age and Insurance Day.