Company Car Tax

[Belindabelle]

Applied for a job which comes with the option of a company car.

Is it still the case this can end up not really being a perk due to increased Tax etc. Benefit in Kind is a phrase I keep reading about. It’s a fully electric car if that makes a difference.

You will pay less for it being electric but the book value of the car is the biggest determiner of how much tax you will have to pay due to it being a benefit in kind.

For a fully electric car the BIK tax is tiny - 2% as opposed to 20 (or 40 % if you are a higher rate tax payer) so really worth it

So is that 2% of the book price that I pay extra in tax per year?

Sorry to sound thick but I would rather look daft on here than admit to potential new employer.

Up until fairly recently I had a company diesel car, that was in low emissions band, so low in fact that the road tax was in the free bracket. I used to pay personal mileage, but the BIK calculator worked it out that my tax on the car was about £70 a month (£20k car). For me it was worth it, even including the personal mileage, as I could not have run a car myself for the same cost. The lease company, or your fleet manager should be able to give you more detailed figures. You will need to check about any additional BIK if they install a charger for you at home, as they were just looking at this when I left.

Its a really complicated issue if you are not familiar with it, its definitely worth asking a few questions.

Do you know what the car is? You can go into the manufacturers website, they usually have the facts and figures under the company car section. You need to know if you are a higher or basic rate tax payer.

Here is Audis pages

www.audi.co.uk/uk/web/en/find-and-buy/business-and-fleet/company-car-drivers.html

If you know what it would be, then there are company car tax calculators - but a quick look says unless it is very fancy you'd pay less than £200 a year in tax - a Tesla model 3 is £230 a year for illustration

Thank you all for the help. I didn’t think the tax would be so low. Definitely worth considering.

it is not 2% of the list price you pay in Tax. You will pay tax on 2% of the value as it is an electric vehicle, this is increasing next year and the one after though.

So say the car is worth 30k. You will pay 20% tax (if a basic rate taxpayer) on £600 (25 of the value) and only for a portion of this year (so around £120 for the year if you got it now)

Hybrid cars are treated as the fuel, and not the electric, so mostly beneficial for Electric only vehicles

You need to ask about details of the scheme, eg any charges for private use.

Where I work, people have stopped having company cars because they kept increasing the private use contribution and even a basic was over £200 pm.