Low tax company cars that suit family life

  • The top ten family cars that are low on company car tax
  • All cars are suited to family motoring and cheap to run
  • Company car tax from as little as £28 a month; all are under £60*

Emissions are key when it comes to company cars. The amount of benefit-in-kind (BIK) tax a driver pays is based on the vehicle’s CO2 output – the same as with private cars – but it has a bigger impact for company car drivers and a small increase in emissions could take a seriously large chunk out of your salary.

In most cases CO2 emissions increase with the size of the vehicle, so finding a car large enough to handle family life can be tricky if you want to keep your bills down.

Here are out top 10 cars that cost less than £60 per month in BIK if you're a 20 percent taxpayer*:

Mitsubishi Outlander PHEV

1 Mitsubishi Outlander 2.0 PHEV GX3h automatic

The company car with the lowest tax bill of our selection is also one of the largest. Mitsubishi’s Outlander SUV spawned a plug-in hybrid (PHEV) variant earlier in 2014, which can travel up to 32 miles on electric power, supplemented by a petrol engine for longer journeys.

Due to the hybrid system’s chunky batteries there’s less boot space than the standard Outlander at 463 litres, but that’s still bigger than most family hatchbacks.

Monthly company car tax: £28

Citroen C4 Cactus

Citroen C4 Cactus 1.2 PureTech Touch                              

Citroen really put some thought in when it built the C4 Cactus. The interior is spacious and full of useful storage areas – the designers even moved the passenger airbag to the roof to create a bigger glovebox.

The 358-litre boot is larger than that of most small crossovers such as the Nissan Juke and average to generous for a family hatchback.

Monthly company car tax: £30

 Skoda Octavia hatchback 

Skoda Octavia 1.2 TSI S hatchback                                                         
Skoda's Octavia defies its proportions with its giant 590-litre boot, which is about as big as it gets for family cars in this class.

There’s heaps of room on the back seats, a hatch between two main rear seats that allows you to load longer items and the boot floor has two sides – one with conventional carpet, the other with a wipe-clean surface for messy family outings.

Monthly company car tax: £41

Volvo V60 Hybrid

Volvo V60 D6 AWD Plug-in Hybrid R Design Lux Nav                    
Volvo estate cars have always been tough, spacious family tools and the V60 is no exception. The plug-in hybrid model gets emissions down to 48g/km, which squashes company car tax bills.

The downside is that the hybrid system’s batteries leave you with a 305-litre boot next to the petrol or diesel versions’ 430 litres, but fold down the rear seats and you end up with 1,241 litres.

Monthly company car tax: £43

Fiat 500L MPW

Fiat 500L MPW 0.9 TwinAir Pop Star seven-seater                 
A bigger version of the successful city car, the seven-seat Fiat 500L MPW has a huge, clever interior. Fold down the two back seats and you end up with a 638-litre boot, drop the middle row and you’re looking at a massive 1,584 litres.

You can lower the front passenger seat to carry longer items and Fiat’s ‘Cargo Magic Space’ system divides the boot into sections to keep heavy, fragile, dirty or clean items apart.

Monthly company car tax: £45

Vauxhall Insignia saloon

Vauxhall Insignia 2.0 CDTi ecoFLEX Design Nav hatchback               

Aimed squarely at company car drivers, the Vauxhall Insignia has a large 530-litre boot. There’s plenty of room in the back seats too, and there’s always the option of the roomier estate if you need more space.

There’s a huge, air-conditioned glovebox and other storage areas such as a little pocket on the driver’s seat for tucking away small items. 

Monthly company car tax: £50

Peugeot Partner Teepee

Peugeot Partner Tepee 1.6 Urban                        

You’ll struggle to find any company car with as much space as the Peugeot Partner Tepee because it’s derived from a van. Leave the rear seats up and there’s a 640-litre boot, fold them flat and you pretty much have a van because there’s 2,800 litres of room.

Factor in the sliding rear doors and aeroplane-style folding tables for the back seats and it doesn’t really get more practical.

Monthly company car tax: £52

Ford Mondeo hatchback 2015

Ford Mondeo 1.6 TDCi ECOnetic Titanium hatchback         

Much like its main rival, the Vauxhall Insignia, the Ford Mondeo is core company car fodder. The new model has just beaten the Insignia with a 541-litre boot when fitted with a space-saver spare wheel, though it doesn’t have quite as much room with the rear seats folded at 1,437 litres vs. the Vauxhall’s 1,470 litres. 

It also has a hatch in the centre of the rear seats for loading longer items. 

Monthly company car tax: £54

Ford Tourneo Connect

Ford Tourneo Connect 1.6 TDCi Style                                 

The Ford Tourneo Connect is another van-derived car, which means it has bags of space.

Sliding rear doors make getting in out really easy and there’s a 520-litre boot when the rear seats are upright. Fold them flat and you get a colossal 2,410-litre luggage area. There’s no shortage of storage spaces throughout the interior, either.

Monthly company car tax: £54

Citroen Grand C4 Picasso

10 Citroen Grand C4 Picasso 1.6 e-HDi Airdream VTR 5dr ETG6

The seven-seat Citroen Grand C4 Picasso is specifically designed for family life. An additional convex rear-view mirror allows you to keep an eye on the kids, while the rear doors open wider than usual to make it easier to bundle them in.

With the two rearmost seats flat but the middle three up, the boot can handle 790 litres of luggage. Fold everything down and you’ll have 2,181 litres available.

Monthly company car tax: £60


It’s easy enough to find a practical family car with low benefit-in-kind tax bills, you just have to pick the model with the lowest CO2 emissions possible, which is why our list contains plug-in hybrids and cars with clean, low capacity petrol and diesel engines.

Not all of the models listed above will necessarily be available to every company car driver, as they may not be on your firm’s choice list, but it is usually possible to opt out and buy one of the above models on a personal contract purchase deal if you want to.

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* All company car tax costs are worked out for a 20 percent tax payer at 2014/15 rates using P11D prices correct at the time of publishing.