If you’re ending a Benefit-in-Kind (BIK) for a company car in BrightPay, here’s how to handle it:

End Date If the employee stops using the car before the end of the tax year, enter an end date to reflect when they returned it.

Cash Equivalent Amount

• Automatic Calculation: BrightPay will automatically adjust the cash equivalent amount based on the start and end dates.
• By default, BrightPay spreads the remaining BIK value over the rest of the financial year.

• Paying All At Once : If you want the full BIK amount to be included in a single pay period, you’ll need open the payslip click on the spanner to the left of the benefit amount, and select Manually Enter Cash Equivalent. 

  

   

• Even if the BIK has ended and fully processed, a value of zero for BIK will continue to show on payslips until the end of the financial year, unless that person leaves the employment. 

Note: If you are having issues entering a company car benefit (BIK) in BrightPay, please check the following:

• Make sure you are entering the car availability dates in the correct tax year.
• If the car was made available to the employee before 6th April, leave the 'date from' field empty.
• If the car was available for the entire tax year, you can leave both the 'from' and 'to' date fields empty.

If an employee makes a capital contribution towards the cost of their company car, this can reduce the car’s P11D value for Benefit-in-Kind (BIK) purposes, but only up to £5,000. Any amount paid over £5,000 is ignored when working out the taxable benefit.

This £5,000 cap is designed to stop very large upfront payments from effectively removing the taxable benefit of a company car, while still giving some recognition for the employee’s contribution. This approach is set out in legislation (ITEPA 2003 s132) and reflected in HMRC guidance.

Please note: If a car benefit has been payrolled and has ended mid-year, there may still be an outstanding amount of 'total cash equivalent' left to be payrolled for the remainder of the tax year, so this amount would be split between the remaining tax months / weeks. If the employee has a replacement car, you could see 2 lines of car benefit on the payslip; 1 for the new car and the 2nd (smaller) amount for the remaining balance of the old car. Unless the employee is a leaver, any balance remaining will be split between all tax periods left within the tax year. If you see a negative payrolled amount for the old car, this means that the payrolled amount YTD is actually higher than the total cash value of that benefit - again the remaining (negative) balance will be split equally between all available tax periods until tax year end.