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.