Company Car Tax - with over 60% of the UK new car sales market being taken up by company fleet vehicles, company cars are highly important for both the driver and for the company or organisation involved. There are currently over 1 million fleet or business vehicle registrations each year!
Back in 2002, a new “Company Car Tax” system was introduced to the UK. This system was designed with the intent to encourage companies and organisations along with the company drivers to choose vehicles that have lower levels of CO2 emissions.
Along with the new “Company Car Tax” system being introduced, so were incentives. These incentives are designed to offer both the company and the driver of the vehicle rewards for choosing vehicles that have low emissions.
Currently the employee “Company Car Tax” is based on a percentage applied to the official price of the vehicle, this is called the P11D. The percentage is predominantly determined on the car’s CO2 emissions. The CO2 percentage applied to the P11D value determines the Benefit-in-kind (BIK) rate that an employee’s PAYE is taxed on.
There is an additional 3% BIK rate supplement for drivers of diesel cars, this reflects the high NOx and particulate emissions. This additional BIK rate supplement has resulted in a significant increase of diesel cars within the UK, an incredible 50% of new cars on the road are now diesels compared to figures of a 20% increase a decade ago. Since this system was introduced “Company Tax Benefits” for zero-emission vehicles has also seen an increase, to the majority of electric car sales being for fleet or company car use.
“Company Car Tax” is a huge industry cost issue, however other vehicle taxes such as Vehicle Excise Duty or “Car Tax” still apply.
If you are looking for a new company vehicle that has low CO2 emissions, try using our quick search tool. This tool is designed to locate the relevant vehicles to you and or your company.
Alternatively if you would like to speak to one of our vehicle experts please click here or call us on 0845 4 900 400.
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