14 Apr Company Cars – Time to Reconsider?
Posted at 17:19h in Accounting, Advice, Business, FAQs, Financial planning, News, Small Businesses, Tax planning
Company cars have been less popular over the years due to often creating a larger personal tax bill on employees than they save on the company’s corporation tax bill.
Benefit in kind taxes are levied on individuals to reflect the monetary value of the perk of a company car. The amount of tax is dependent on the cars list price and CO2 emissions. Generally, the higher the emissions the higher the tax. Tax exemptions on electric and low emission vehicles could be set to change the landscape for larger organisations as well as owner managed businesses.
TAX RATES on electric cars
The table below shows benefit in kind rates for vehicles with less than 50g/km CO2 emissions post 6th April 2020.
|Vehicle CO2 emissions||BiK rate for cars registered after 6 April 2020|
|1-50 g/km (electric range >130 miles)||n/a||0%||1%||2%|
|1-50 g/km (electric range 70-129 miles)||n/a||3%||4%||5%|
|1-50 g/km (electric range 40-69 miles)||n/a||6%||7%||8%|
|1-50 g/km (electric range 30-39 miles)||n/a||10%||11%||12%|
|1-50 g/km (electric range <30 miles)||n/a||12%||13%||14%|
Other benefits of electric and low emission cars include reduced road tax and exemption from ULEZ and congestion charges.
If you’re considering the option of purchasing or leasing a car, it may be worth considering whether an electric car is the way forward.