A company car remains a highly attractive “perk of the job”. It’s a key benefit that can help employers to attract and retain the best talent.
An employee may be able to choose the car’s make and model, but their decision will help to determine how much tax they will pay, because HMRC considers company cars to be a benefit-in-kind (BIK).
Less tax is payable on cars with lower CO2 emissions. Pure electric vehicles are no longer exempt, although the tax rates are relatively low. Most diesel cars carry a four per cent surcharge over petrol-engine models.