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Great British BIK Off: cars costing under £100 per month

  • New BIK rates come into force on 6 April 2018
  • Diesel cars penalised further
  • Which cars are the best value for under £100/month?

Choosing your next company car is an exciting, but daunting prospect – and if you’re still looking at last year’s spreadsheets, some of those tempting diesels or ultra-low emissions vehicles may come with an unwelcome extra cost.

Diesel cars are subject to a 4% supplement over petrol models with comparable CO2 emissions, unless they adhere to Euro 6d (also known as RDE2, or Real Driving Emissions stage 2).

Euro 6d compliance also avoids the first-year VED penalty applied to diesel cars sold in the UK.

The current list of vehicles with Euro 6d emissions, on sale in the UK as these rates come into force, is reproduced in full below.

 

You will have noticed that there are no cars listed at present, because there aren't any available. Yet.

Joking aside, BMW, MINI, Peugeot, Citroen and Volvo are among the firms with cars on sale in Europe that are Euro 6d-Temp compliant– a precursor to RDE2/Euro 6d standards which will be mandatory on newly launched models after January 2020, and all cars sold after January 2021.

If before that legislation comes into force a manufacturer launches a Euro 6d-compliant diesel, HMRC will charge taxation at the same rate as a petrol equivalent in the same claim that if manufacturers offer models that meet the standards before then, the diesel supplements won't apply to those vehicles.

Finding the best value for a specific bodystyle or marque is hard enough, but if you don’t mind what you get and are more concerned about what you pay, then the selection we’ve picked for a monthly budget of between £30 and £100 per month could tempt you.

Benefit-in-kind is driven not only by emissions, but the P11D value of the car - including any fitted options - which is also a significant factor; we’re looking at the cost to you if these cars are available on your firm’s company car scheme and you are only liable for BIK.

Electric/zero-emissions cars and BIK

Due to a quirk of the new banding, electric and ultra-low emissions vehicles are being heavily penalised until 2020.

As such, this means cars like the Renault Twizy or Zoe will get hit with the same 13% tariff as low-emission petrol engine models.

However, plug-in hybrids like the Hyundai Ioniq will benefit from lower rates from 2020, and lower CO2 models will have their advantages restored around the same time, with vehicles up to 69g/km benefitting from a reduction in benefit-in-kind liability.

BIK after April 2020 for electric vehicles and hybrids

After April 2020, vehicles emitting between zero and 50g/km of CO2 will be charged based on their electric range, starting at 2% of P11D. As an example, the Renault Zoe will go from a benefit-in-kind value of £2,990 down to £374, and a liability for 20% taxpayers falling from a high of £598 per year in 2019/20, to £75 in 2020/21.

If you’re considering an electric car, or any car producing under 50g/km and capable of EV-only driving, bear in mind the rates may well reduce if you are still in that vehicle after April 2020.

Figures given are for a 20% taxpayer in England & Wales (Scottish rates of income tax differ slightly). Chances are, if you’re being offered a company vehicle with a high BIK charge you’re in the 40% band.

GBBO: Cars under £30/month

There’s not much available with a BIK charge under £360/year; for 2018/19 there are three options:

Renault Twizy - £19/month

Renault Twizy

If you are tempted by a Twizy - perhaps the placement in Ready Player One inspired you - the maximum £18.50/month - £222 annual BIK applicable under the highest 16% rates before April 2020 will drop to a very reasonable £28 per year (£2.30/month) when the new electric range-based rates come into force.

Dacia Sandero 1.0 SCe Access - £27/month

Dacia Sandero

It's inevitable that the Dacia features here - although the percentage of P11D applicable is fairly high, due to the conventional 1.0-litre petrol engine, the actual value it's a percentage of is incredibly low.

Take a standard Sandero Access and the P11D is £5,780, with emissions of 117g/km. The rate will increase from 24% in April 2018, to 28% by April 2020, so the most you will pay over the next 3 years is £27/month.

If you want more luxury, don't be tempted to put a cash contribution in though - the rest of the range is competitive and a 1.5-litre diesel in Ambiance trim hits £42.50/month by 2020.

Suzuki Celerio SZ2 - £29/month, but we had to cheat

Suzuki Celerio

We'd choose the Dacia, but if you prefer your bumpers painted, Suzuki's Celerio SZ2 has a P11D of £7,824 combined with emissions of 99g/km. In the first and second years, at 20% and 23% respectively, it's within budget. An increase to 24% in 2020 puts it above the £30/month threshold.

If you average out the BIK over the three years, then it still comes to £29.14/month.

GBBO: BIK costs of £30-50/month

That small increase in monthly budget nets a reasonable haul of appealing superminis and electric cars - £600 per year BIK liability for 20% taxpayers encompasses most small battery electric vehicles like the Smart Forfour and Renault Zoe. These, of course, will drop to a 2% rate after 2020.

Toyota Yaris 1.5i VVT-i Hybrid Active CVT - £48/month

Toyota Yaris

If a supermini is tempting, the Toyota Yaris 1.5i VVT-i Hybrid Active CVT, which with emissions of 75g/km is the sort of city car the government should be encouraging – however, thanks to the BIK rate of 16% (rising to 20% by 2020), and a P11D value of £15,490, it will cost £488, or £40.66/month in 2018/19 and £579 in 2019/20 - or £48.25 per month.

After April 2020 it will be £50.80/month, despite that sophisticated powertrain.

Citroen C3 1.2 PureTech Touch 68hp - £49/month

Citroen C3

Forget the hybrid technology, and the best blend of modernity, space and equipment is the Citroen C3 1.2 68hp PureTech Touch. Emissions of 108g/km place it in the 22% bracket for 2018/19, increasing to 26% in 2020.

The Touch, as an entry-level model, is somewhat cheaper than the rest of the C3 range - so those percentages are offset by a low P11D value of £11,360. A 20% tax payer’s liability begins at £500 in 2018 and will be £591 in 2020 – £49.50/month.

A similar amount will get the Dacia Logan MCV with 1.5-litre 90hp diesel engine and Ambiance trim, if you prefer something with more space.

GBBO: Sophisticated hybrid for £50-75/month

If you’re after luxury, space and equipment, then conventionally fuelled cars won’t be easy to find in this budget. However, the range of hybrid models on the market has expanded.

Thanks to the planned 51-75g/km 19% BIK rate in 2019, the majority of hybrids designed to undercut the 75g/km threshold are going to be hit harder than expected, and as these are among the more expensive models for a given range the case for a hybrid has been significantly eroded.

After the changes planned for April 2020, however, plug-in hybrids with a reasonable pure electric range will regain their advantage.

Hyundai Ioniq 1.6 GDi Plug-in Hybrid - £73/month

Hyundai Ioniq

This leaves just one larger car among the bargain-basement petrol superminis – the Hyundai Ioniq Plug-in Hybrid, which is one of the most affordable models in the class. A zero-emission range of 40 miles ensures that from 2020, it will attract a 12% BIK charge and cost just £54.92/month, while a P11D value of £27,440 ensures that even with the 16% tax for 2019/20, the monthly cost is below £75.

GBBO: Advanced executive cars at £75-100/month BIK

Crossovers and SUVs start to feature here, and a much wider range of cars - though diesel and petrol models are still on the smaller side and of lower specification. For example, a fairly typical choice such as the Skoda Octavia Estate with either of the lowest CO2 powertrains will exceed £100 per month after April 2019, and more powerful, desirable models in the range are significantly higher.

If your company car scheme allows you access to higher-priced hybrids, though, your monthly costs can be kept low while keeping your sights aimed high.

Mitsubishi Outlander PHEV 3h - £93/month

Mitsubishi Outlander PHEV

Top of the tree for space, ability and costs is the Mitsubishi Outlander PHEV. Producing just 41g/km, it gets to stay in the lowest band until 2020, at 13% rising to 16% then falling to 12% when BIK is calculated on EV range.

A P11D value of £34,750 gives a 20% taxpayer a liability of £1,112 at most, or £92.66/month for 2019/20, reduced to £69.50/month in April 2020.

This capable SUV has on-demand all-wheel drive, an EV range of up to 33 miles, and plenty of space for people and luggage.

BMW 330e Luxury - £98/month

BMW 330e ActiveHybrid

Traditionalists will like the BMW 330e. Conventional saloon styling, 0-62mph in 6.2 seconds and a top speed of 140mph meet emissions of 49g/km and a P11D not far off that of the Outlander, at £36,920 for the Luxury edition. At most, the higher 16% BIK rate will mean a 20% taxpayer liability of £1,181, or £98/month, falling to £86/month in April 2020 when the sub-50g/km emissions and short EV range put it at 14%.

Kia Optima Sportswagon 2.0 GDi PHEV - £94/month

Kia Optima Sportswagon

If you want space and a sporty-looking estate car, the Kia Optima Sportswagon PHEV is one many will overlook. Yet with 33g/km CO2 13% 16% falling to 12% in 2020. A 60-mile EV range ensures that while the tax is £94/month at its highest, it will drop to £70/month when the BIK rate falls to 12%.

MINI Cooper Convertible - £98/month

MINI Convertible Cooper 1.5

Not a hybrid, but low enough cost and emissions to fall into the sub £100/month bracket for the next three years - the MINI Cooper Convertible provides a small four-seat open-topped option, and highlights the dance manufacturers have to do to stay within the most advantageous and appealing tax brackets.

MINI has reduced their diesel range dramatically - and your Cooper Convertible will only meet our figures if you have it with no options. The P11D value of £20,975 and conventional powertrain mean BIK will be calculated at 24% for 2018/19 rising to 28% by 2020, when the hybrid choices will be benefitting from reductions in BIK tax.

Even so, the most  it will cost per month during those three years is £98 - as long as you have the basic specification.


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