Save on Class 1A NICs
To save on Class 1A National Insurance Contributions (NICs) and save your employees Benefit-in-Kind (BIK) tax, choose a Car Benefit Solutions (CBS) Employee Car Ownership Scheme (ECOS).
NICs are subject to annual increases, which can lead to your benefits bill being unpredictable and means year-on-year your outgoings will rise.
It has been announced that NICs will be increasing by 1.25% as of April 2022, so employers will be contributing 15.05% in NICs on employee car benefits, up from the current rate of 13.8%.
The Class 1A NICs are calculated by the P11D value of the vehicle, multiplied by the BIK rate and then by the percentage contribution. The below table demonstrates the increases for both ICE vehicles and EVs.
|Tax year 2021/22||ICE vehicle||Electric vehicle|
|CO₂ emissions||120g/km (28% BIK)||0g/km (1% BIK)|
|Class 1A NICs (per annum)||£1,546||£69|
|Tax year 2022/23||ICE vehicle||Electric vehicle|
|CO₂ emissions||120g/km (28% BIK)||0g/km (2% BIK)|
|Class 1A NICs (per annum)||£1,686||£151|
|Increase in 2022||+£140||+£82|
Reduce Write-Down Costs
Car Benefit Solutions (CBS) understands that write-downs represent a huge cost for dealers.
Implementing an Employee Car Ownership Scheme (ECOS) is an alternative way to eliminate your write-down costs.
An ECOS removes the company car tax liability for the employee, but can keep their repayments the same, while removing the write-down costs for the business.
The table below illustrates how the business could face a write-down cost of £1,000 when implementing a traditional company car structure. This cost can be removed without impacting the employee’s repayment.Contact us to reduce your write-down costs