What is Benefits in Kind? UK Definition 2026/27
Quick Answer
Non-cash perks from employers that are taxable, like company cars or private healthcare.
Definition of Benefits in Kind
Benefits in Kind (BIK) are non-cash benefits you receive from your employer that are subject to tax. Common examples include company cars, private medical insurance, gym memberships, and interest-free loans. The taxable value is added to your income and taxed at your marginal rate.
Benefits in Kind — Key Facts for 2026/27
| P11D Deadline | 6 July annually |
| Car BIK rates | 2-37% of list price |
| Electric car BIK | 2% (2026/27) |
| Loan threshold | £10,000 |
How Benefits in Kind Works — Example
- 1Car list price: £35,000
- 2CO2 emissions: 130g/km (30% BIK rate)
- 3Taxable benefit: £35,000 × 30% = £10,500
- 4Tax at 40%: £4,200 per year
- 5Monthly cost: £350
How Benefits in Kind Affects Your Tax
Benefits in Kind can significantly increase your tax bill. Electric vehicles have the lowest BIK rates making them tax-efficient. Consider salary sacrifice schemes which can reduce both income tax and NI.
Official HMRC Guidance on Benefits in Kind
For official guidance, refer to HMRC's documentation. Tax rules can change, so always verify current rates and thresholds on gov.uk.
HMRC: Tax on company benefitsFrequently Asked Questions about Benefits in Kind
Related Tax Terms
Accuracy Note
This information is for guidance only and is based on 2026/27 tax year rates. Tax rules are complex and your circumstances may differ. For personal advice, consult a qualified accountant or tax adviser.