Learn How You Can Save £2200 In Company Car Tax In 2019
In November 2015, the government postponed the merger of the petrol and diesel benefit-in-kind (BIK) tax bands. The 3% surcharge was set to disappear in April 2016, but in 2019/20 it will instead increase to 4%. Fully expensed cars were already expensive, but with annual increases, how long is it before they are gone forever?
To put this in real terms, let’s compare the price hike of a BMW 3 series (2.0 316d SE Saloon), which according to Nexus Rental is one of the top 5 most popular company cars in 2018:
|CO2 emissions band||32%*||26%*|
|Fuel Benefit-In-Kind (FBIK)||£7,488**||£5,876|
|Cost to a 40% taxpayer||£2,995.20||£2,350.40|
|Advisory Fuel Rate||£0.12||£0.12|
*including relevant surcharges
** assuming the FBIK charge remains at £23,400 for 2019/20
Focusing only on the cost of fuel benefit-in-kind (FBIK), a 40% tax payer driving this popular company car will now pay almost £650 more in tax per annum.
In order for a fully expensed car to be of financial value to a driver, they need to pay less in tax than what they would in fuel. At £2,995.20 and an Advisory Fuel Rate of £0.12 (as of December 1st 2018), a driver would have to complete 24,960 private miles annually to break-even. A considerable amount considering the average private mileage is 6,580 miles (Department of Transport). In fact, if the driver was average, their annual fuel bill would be £789.60, a staggering £2,205.60 cheaper than FBIK tax option. Imagine telling each fully expensed driver you could put an extra £2,200 into their back pockets..
Every driver will have a unique case, which can make crunching the numbers for your fleet tricky. This is where ABAX can help, we have created a Company Car Tax Calculator that will do the company car tax calculations for you. In just few minutes you will get a clear picture of savings for your drivers and your company. So give it a try and see how much you can save.