If you are a company car driver, or run your own company, you may be aware that it is becoming increasing more difficult to beat the tax man. Here’s my thoughts on the best way forward…
To van, or not to van, that is the question. Since forever, double cab pick-up trucks have been classified as vans for tax purposes, so if you chose one of these vehicles as your company car and you use it privately, then you pay tax on a fixed rate given to us by HMRC. For 2024/25 you’ll pay tax on £3,960. You pay more if you are provided fuel for private journeys too. Given these vehicles are usually very luxurious these days the tax charge is actually very reasonable. There is an NIC cost too, but if your personal use is high, then certainly worth exploring.
Earlier this year HMRC attempted to reclassify these vehicles as cars, meaning the tax cost would have sky rocketed, but thankfully they gave into pressure from the construction and farming industries, so this route still works.
If you have a greener mindset, then good news. Fully electric cars only attract a tax charge on 2% of the list price. So a new BMW iX costing a cool £71,000, will only cost you £568 a year if you’re a higher rate tax payer. That’s a cheap way to have unlimited private use of a luxury vehicle.
Hybrids can work too, but you’ll need to find one with a long electric range, ideally more than 70 miles, which are hard to find.
Whether we like it or not, with the phasing out of petrol and diesel cars planned for 2035, greener alternatives need to be considered (even if it is just to save tax!)