Time to ‘e-think’ the company car?

Company cars have been deeply unfashionable for more than a decade now. In that time, the vast majority of company directors and employees understand that they are better off buying a car personally and then claiming the associated expenses.

Concern for the environment was the reason why a more punitive tax regime was placed on the owners of company cars in the first place. Tax was tethered to the value of the car and the level of CO2 emissions belched out.

However, could the downward trend be reversed? 

The introduction of electric powered cars has reignited the debate on what the levels of company car taxes should be.

Now, the Government says that company car drivers choosing a pure electric vehicle will pay no benefit-in-kind (BIK) tax in 2020/21.

It has created two new BIK tables for company car drivers; a table for those driving a company car registered after April 6, 2020, and one for those driving a company car registered before April 6, 2020. Speak to Murray if you want to see either table.

In a nutshell, what it means for motorists is that pure electric cars offer outstanding tax advantages.

Hybrids, which are currently more popular and accessible at this point in time, also make sense as a company car. Those with a 40-mile range will have a very low 8% tax rate. Company cars with CO2 emmisions below 75gkm are a good choice as a company motor compared to the alternative diesel/petrol models.

One client recently saw more than £10,000 knocked off his tax bill because he plumped for the Range Rover Hybrid model over the petrol version.


Our prediction is that there will be an upward swing in demand for electric vehicles, not least from socially responsible fleet managers in the business world, but also for business owners driving cars at the luxury end of the market. These new tax advantages will see a rise in the number of company cars on the road.

With more e-charging points being installed across the country, improvements to the range of electric engines and a steady fall in the price we are sure to see a renaissance of the company car – one that might be more suitable for you than your current arrangements.

For a review of your company car tax status or that of your existing fleet for your business call Murray Patt on (0161) 980 8788.