Choosing your next company car is exciting and lets be honest: the last thing anyone wants to think about is how much tax you’re going to pay.
But it’s an important consideration and it’s not just about picking an affordable monthly payment for this year, either. With tax bands rising you need to ensure that the car you choose still keeps tax bills low for the next three or four years to come.
Diesel supplement
Since April 2002 company car tax has been based on a car’s P11D price and official CO2 emission figures.
There’s also a three percent supplement charge for diesel cars added as they are deemed dirtier than petrols. The surcharge was due to be scrapped in April 2016 but will now remain in place until 2021.
Petrol engines have been catching up with diesels for fuel economy and CO2 emissions and can sometimes be a more cost-effective choice if you don’t travel a lot of miles each year.
Changing BIK Tax bands
BIK tax bands are changing each year and apart from the diesel supplement being removed – which will see most diesel cars fall one BIK tax band for the 2016/17 tax year – they generally go up.
It’s important when you look to choose your next company car that you not only look at what you’ll be paying for the next 12 months, but also look at the amount you will be paying over the next three or four years.
The good news is that company car tax bands are published well in advance so you should be able to calculate your monthly tax costs easily.
Petrol vs diesel
Although petrol engines have been catching up over recent years, diesel is still king of the company car park because of the higher fuel economy and lower CO2 emissions.
Retail buyers would need to travel a fair amount of miles each year to offset the premium for diesel cars, but for company car drivers diesel cars are not only cheaper to tax in most cases, they are also more economical meaning less visits to the fuel station too.
However new petrol engine like Ford’s EcoBoost engine are giving diesel a proper run for its money and because the P11D prices are generally cheaper, our below example mean it’s the cheapest option overall.
|
|
Petrol |
Diesel |
|
|
1.0 EcoBoost Zetec |
1.5TDCI Zetec |
|
P11D price |
£18,740 |
£19,440 |
|
MPG |
60mpg |
74mpg |
|
Power |
123bhp |
118bhp |
|
CO2 emissions |
108g/km |
98g/km |
|
2015/16 BIK tax band |
16 |
17 |
|
2015/16 monthly tax cost* |
£49.97 |
£55.08 |
|
2016/17 BIK tax band |
18 |
19 |
|
2016/17 monthly tax cost* |
£56.22 |
£61.56 |
|
2017/18 BIK tax band |
20 |
21 |
|
2017/18 monthly tax cost* |
£62.47 |
£68.04 |
|
2018/19 BIK tax band |
22 |
23 |
|
2018/19 monthly tax cost* |
£68.71 |
£74.52 |
BIK tax bands
Below is a list of the BIK tax bands for the next four years – remember to add the three percent diesel surcharge for the 2015/16 tax year.
|
BIK % |
2015/16 |
2016/17 |
2017/18 |
2018/19 |
|
CO2 (g/km) |
CO2 (g/km) |
CO2 (g/km) |
CO2 (g/km) |
|
|
0 |
0 |
N/A |
N/A |
N/A |
|
5 |
0-50 |
N/A |
N/A |
N/A |
|
6 |
N/A |
N/A |
N/A |
N/A |
|
7 |
N/A |
0-50 |
N/A |
N/A |
|
8 |
N/A |
N/A |
N/A |
N/A |
|
9 |
51-75 |
N/A |
0-50 |
N/A |
|
10 |
N/A |
N/A |
N/A |
N/A |
|
11 |
N/A |
51-75 |
N/A |
N/A |
|
12 |
N/A |
N/A |
N/A |
N/A |
|
13 |
76-94 |
N/A |
51-75 |
0-50 |
|
14 |
95-99 |
N/A |
N/A |
N/A |
|
15 |
100-104 |
76-94 |
N/A |
N/A |
|
16 |
105-109 |
95-99 |
N/A |
51-75 |
|
17 |
110-114 |
100-104 |
76-94 |
N/A |
|
18 |
115-119 |
105-109 |
95-99 |
N/A |
|
19 |
120-124 |
110-114 |
100-104 |
76-94 |
|
20 |
125-129 |
115-119 |
105-109 |
95-99 |
|
21 |
130-134 |
120-124 |
110-114 |
100-104 |
|
22 |
135-139 |
125-129 |
115-119 |
105-109 |
|
23 |
140-144 |
130-134 |
120-124 |
110-114 |
|
24 |
145-149 |
135-139 |
125-129 |
115-119 |
|
25 |
150-154 |
140-144 |
130-134 |
120-124 |
|
26 |
155-159 |
145-149 |
135-139 |
125-129 |
|
27 |
160-164 |
150-154 |
140-144 |
130-134 |
|
28 |
165-169 |
155-159 |
145-149 |
135-139 |
|
29 |
170-174 |
160-164 |
150-154 |
140-144 |
|
30 |
175-179 |
165-169 |
155-159 |
145-149 |
|
31 |
180-184 |
170-174 |
160-164 |
150-154 |
|
32 |
185-189 |
175-179 |
165-169 |
155-159 |
|
33 |
190-194 |
180-184 |
170-174 |
160-164 |
|
34 |
195-199 |
185-189 |
175-179 |
165-169 |
|
35 |
200-204 |
190-194 |
180-184 |
170-174 |
|
36 |
205-209 |
195-199 |
185-189 |
175-179 |
|
37 |
210+ |
200+ |
190+ |
180+ |
Calculating company car tax
Calculating your company car tax is easy with the Parkers company car tax calculator. Simply enter the car you wish to calculate the tax for by using the drop down menus plus the amount of tax you pay – 20, 40 or 45 percent.
Click here to use our company car tax tool.
Need more help? These articles may help.
Your complete guide to BIK tax
Saloon cars that cost less than £75 in BIK
Executive cars for less than £150 a month
Top low-tax diesel company cars
*Monthly tax costs are based on a 20 percent tax payer
