CarLease UK

Car Leasing & Contract Hire News, Mews & Reviews

Company Car Allowance; BiK, WLTP & C02 Considerations

4 October 2018 by phil

Like many enterprises, the question of leasing through the company or a car allowance, is one which is being raised more often.

Much of this has come about because HMRC have continued to increase the Benefit in Kind (BiK) bands which apply to company car users.

When you are offered a company car, you need to know a number of key points which will help you to understand the taxation exposure, including:

· P11d of the vehicle – every new car you can procure will show you this value. This is the list price (including Vat) plus any additional extras (factory or dealer) and delivery. It does not include the first registration fee or VED. The more expensive the car, the more expensive the P11d. One point to consider, is that a more expensive car (from a P11d viewpoint) may not always not be the most expensive from a rental perspective;

· CO2 of the vehicle – every new car will display a CO2 figure shown as “grams per kilometre” (g/km). The more polluting the vehicle, the more expensive the taxation will be. This is because HMRC set BiK percentage bans which range from 2% to 37%.

For example, in 2017-2018 a car emitting 50g of CO2 or less would have a BiK rate of 5% BUT in 2020-21 this would be 14%.

More higher performance vehicles are likely to increase in CO2 under the WLTP testing and so will make these vehicles sit in the higher BiK rates.

· Your personal taxation threshold – as part of your calculations you also need to know you own income tax levels. Are you a 20/40/45% tax payer? The higher your salary, the more income tax you pay. This also will influence the level of company car tax you will pay.

What is perhaps complicating some of the above is the Worldwide Harmonised Light Vehicle Test Procedure (WLTP). This applied for any new cars from September 2017 with a view that it would apply to all new car registrations from September 2018. Essentially, to improve the quality of testing conditions, the new tests will add certain improvements including:

· More realistic driving behaviour;
· Higher average speeds;
· Long distance test;
· A greater range of driving situations;
· Short-stops; and
· Stricter measurement conditions.

With the new WLTP conditions, we are likely to see vehicles producing more CO2. This is therefore going to increase the level of BiK for company car users.

When customers are researching a new car, this might create a situation where they need to consider 1) an electric/PHEV style vehicle; or 2) a car allowance. Obviously this will all be subject to driving style, budgets and the fleet policy.

The key for any company car driver is to research your taxation position first.

Do not be persuaded simply by a cheap rental, as this might not be the best solution for you moving forwards.

Read more car leasing help and advice or check out some of our recent business lease car reviews below.

In Review; Ranger Rover Sport HSE

In Review; BMW 330e M Sport 4 Door Step Auto (PHEV)

In Review; Mercedes Benz E220d AMG Line

In Review; Jaguar F Pace 2.0d R-Sport AWD (Diesel/ Auto)

In Review; BMW 335d xDrive M Sport

Filed Under: Leasing News Tagged With: advice, Benefit in kind, bik, business, Company Car, deals, help, tax, wltp

In Review; Jaguar iPace 294kW EV400 HSE 90kWh (Auto/ Electric)

All electric cars are ugly and unusable? Surely electric cars are just short-term phase and won’t really catch on? … [Read More...]

In Review; Tesla Model 3 Long Range AWD 4dr (Auto/ Electric)

What is the best electric car to lease in 2019? When is that new Model 3 Tesla ready to price and order? Looking back over … [Read More...]

Best Audi A3 Car Leasing deals

The Best Audi A3 Car Leasing deals

Audi A3 Car Leasing Deals Happy new car day to this Camden-based personal leasing customer. And a big thank you to … [Read More...]

the ultimate electric supercar

Is the Porsche Taycan the ultimate electric supercar?

The Ultimate Electric Supercars are available now Nothing has given the world of EVs more credence, or excitement, than … [Read More...]

Do I need to regularly charge my PHEV

Do I need to regularly charge my PHEV?

Thank you to our business car leasing customer, from Hereford, for sending pictures of their latest fleet addition - the … [Read More...]

Audi PHEV Car Lease

Audi PHEV Car Leasing

Audi PHEV Car Leasing Thank you to our business car leasing customer for allowing our dealership partners, Worcester … [Read More...]

Lease a New Car Before Brexit

Why NOW is the time to lease a new car (before Brexit)!

If you are able to turn your attention away from the COVID/Coronavirus situation for just a moment, you may remember that … [Read More...]

No Deposit Car Leasing

No Deposit Car Leasing – Myth or Real?

Do I have to pay a big deposit when I lease a new car? Firstly, thank you for the pictures of this brand-new BMW 3 … [Read More...]

Find & Follow CarLease UK

search for a lease car

In Review; Jaguar iPace 294kW EV400 HSE 90kWh (Auto/ Electric)

… [Learn More...]

In Review; Tesla Model 3 Long Range AWD 4dr (Auto/ Electric)

… [Learn More...]

In Review; VW Golf 2.0 TDI R-Line 5dr DSG (Diesel/ Auto)

… [Learn More...]

In Review; Tesla Model S 90kWh Dual Motor 5dr (Auto/ Electric)

… [Learn More...]

Best Electric Lease Car Deals 2019 for Company Car Drivers

… [Learn More...]

Best Audi A3 Car Leasing deals

The Best Audi A3 Car Leasing deals

Audi A3 Car Leasing Deals Happy new car day to this … [Read More...]

the ultimate electric supercar

Is the Porsche Taycan the ultimate electric supercar?

The Ultimate Electric Supercars are available … [Read More...]

Do I need to regularly charge my PHEV

Do I need to regularly charge my PHEV?

Thank you to our business car leasing customer, from … [Read More...]

Audi PHEV Car Lease

Audi PHEV Car Leasing

Audi PHEV Car Leasing Thank you to our business … [Read More...]

Lease a New Car Before Brexit

Why NOW is the time to lease a new car (before Brexit)!

If you are able to turn your attention away from the … [Read More...]

No Deposit Car Leasing

No Deposit Car Leasing – Myth or Real?

Do I have to pay a big deposit when I lease a new … [Read More...]

van lease uk promo

CarLease UK, VanLease UK and School Minibus Leasing UK are trading names of CarLease (UK) Ltd,

Call 01942 608 606 or Contact Us

Browse by Manufacturer | Check the Latest Deals | Browse by Type | Get Help & Advice | Areas Covered | News & Car Reviews

Ts&Cs | Privacy Policy | Procedure For Complaints | Information Notice  |  Initial Disclosure Document  | Terms of Business | Sitemap

All images on this website are for illustrative purposes only.

CarLease UK & VanLease UK work alongside a limited number of finance providers who may make payment to us if you enter into an agreement with them. Failure to maintain payments may result in the vehicle being withdrawn.

CarLease (UK) Ltd is Authorised and Regulated by the Financial Conduct Authority FRN 706617. Please note that CarLease (UK) Ltd is a credit broker and are not a lender. | FRN 706617 | BVRLA Membership No. 1471 | Data Protection Reg. ZA088399 | Registered in England 09312506

Copyright 2018 © CarLease (UK) ltd. All Rights Reserved.Registered Office Kings Business Centre, Warrington Road, Leigh, Manchester, WN7 3XG.
Call 01942 608 606 or Contact Us