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What is the Current Annual Percentage Rate for Calculating Class 1A National Insurance Contributions?
Class 1A National Insurance Contributions (NICs) must be paid by the employer for each vehicle provided to an employee for personal use. Class 1 NICs are based on the vehicle’s P11D value and relevant Benefit in Kind (BIK) rate.
The level of NICs is also determined by an annual percentage rate which is 13.8% in financial year 2021/22.
The BIK rates used in the calculation can be found here.
The basic calculation to determine the amount of Class 1A NICs payable is as follows:
P11D value x BIK rate based on CO2 × 13.8% = NIC (2021/22)
Examples:
VW ID.3
P11d value – £32,200 | BIK rate – 1%
(32,200 × 1%) x 13.8% = £44.44
Porsche Taycan
P11d value – £88,272 | BIK rate – 1%
(88,272 × 1%) x 13.8% = £121.82
BMW 520d
P11d value – £43,540 | BIK rate – 35%
(43,540 × 35%) x 13.8% = £2,102.98
