What are advisory fuel rates and how do they work? Follow What Car? Quick search. All car reviews All new car deals Used cars for sale All used makes Vans and commercial vehicles New car awards Used car awards. Legal bits. About What Car? Information for dealers Sitemap Contact What Car? If you do very little private mileage - i. Electricity provided to recharge a company EV, whether at home or in the office, is not currently taxed as a benefit by the HMRC.
A high-mileage driver will usually recover the difference in terms of better fuel economy. Making financial contributions to your company car scheme will lower your BiK rate, while employees who use their car part-time are also liable for less BiK tax. Some companies offer the choice of a car allowance as an alternative to a company car. This is essentially a cash amount given to you each month to help with your personal motoring costs. As with anything, there are advantages and disadvantages to this.
For the best company cars you can buy in see our list of best company cars , or if your other car isn't a company car, read our guide to car tax for private owners. Towing with an electric car, hybrid or plug-in hybrid - what's the capacity and can you tow a caravan? Skip to header Skip to main content Skip to footer. Tips and advice Home Tips and advice. Best small company cars The flip side of the coin is that high earners driving an expensive car with a high CO2 emissions figure pay the most.
How does company-car tax work? Tax on company provided fuel If you use company provided fuel for personal miles - which includes commuting - then the HMRC will tax you on that benefit too. Use the company car tax calculator to view the BIK rates and tax payable for a specific make or model during the period - All tax rates shown reflect changes announced in Budget Select the 'Used' button if your car is not currently available to purchase as a new model.
Company car tax rules have been designed to encourage company car drivers to choose cars with lower levels of CO2 and from April NOx emissions; incentives are offered both to the company and to the recipient of the vehicle to select low emission vehicles. Under the current system, company and employee company car tax are both based on a percentage of the official value of the car called the 'P11D' , the percentage being primarily determined by the car's CO2 emissions.
To complicate matters further, however, WLTP emission tests were phased in for newly type approved vehicles, so two sets of BiK rates exist that aim to make things more fair.
These two systems see cars registered prior to 6 April subject to one set of BiK rates known as NEDC-correlated rates , and those registered after that date which will have been assessed under WLTP subject to another.
The set of rates for post April cars effectively knocks a percentage point off the BiK, with the intention of leveling the playing field as these cars, like for like, will have on-paper CO2 emissions that are around 20 per cent higher though this varies from model to model.
To make things even more complicated, diesel cars are subject to a four per cent BiK surcharge if they do not meet a component of WLTP emission regulations called RDE2 - although, to add yet more granularity, this surcharge does not apply to non-RDE2 diesel hybrids. This means company car drivers who choose an EV will save thousands compared with the driver of a comparable diesel. Most newer diesels are RDE2-compliant cars, now, though.
Yes, if you can. But while BiK rates apply every year for company car drivers, only the first year of road tax is linked to CO2 emissions, with a flat rate for following years.
Find out about the tax benefits of double cab pick-up trucks here
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