THE RESURGENCE
OF THE COMPANY
CAR
THE RESURGENCE OF THE COMPANY CAR
Business drivers are reaping the benefits of alternatively fuelled company cars.
Attractive Benefit in Kind (BiK) rates on hybrid and fully electric vehicles has led to a resurgence in drivers choosing a company car over a cash allowance.
Lowering BiK considerably on ultra low emission vehicles (ULEV) was a strategic move from the government - one that heavily incentivises the adoption of electric vehicles.
What’s more, the government has committed to not raising BiK above 2% on fully electric cars until 2025 at the earliest. As a result, drivers will continue to pay much less BiK tax for the foreseeable future if they opt for an alternatively fuelled company car.
Click the tabs below to compare company car tax payments across our iV range.
ENYAQ iV 60 Suite
| Tax year to 5th April | 2021/22 | 2022/23 | 2023/24 |
| P11D value | £34,855 | £34,855 | £34,855 |
| Percentage charge | 1% | 2% | 2% |
| Benefit in kind | £349 | £697 | £697 |
| Tax payable at 20% | £70 | £139 | £139 |
| Tax payable at 40% | £139 | £279 | £279 |
ENYAQ iV 80 Suite
| Tax year to 5th April | 2021/22 | 2022/23 | 2023/24 |
| P11D value | £40,605 | £40,605 | £40,605 |
| Percentage charge | 1% | 2% | 2% |
| Benefit in kind | £406 | £812 | £812 |
| Tax payable at 20% | £81 | £162 | £162 |
| Tax payable at 40% | £162 | £325 | £325 |
Octavia iV
| Tax year to 5th April | 2021/22 | 2022/23 | 2023/24 |
| P11D value | £31,170 | £31,170 | £31,170 |
| Percentage charge | 7% | 8% | 8% |
| Benefit in kind | £2,182 | £2,494 | £2,494 |
| Tax payable at 20% | £436 | £499 | £499 |
| Tax payable at 40% | £873 | £997 | £997 |
Superb iV
| Tax year to 5th April | 2021/22 | 2022/23 | 2023/24 |
| P11D value | £35,280 | £35,280 | £35,280 |
| Percentage charge | 11% | 12% | 12% |
| Benefit in kind | £3,881 | £4,234 | £4,234 |
| Tax payable at 20% | £776 | £847 | £847 |
| Tax payable at 40% | £1,552 | £1,693 | £1,693 |
As the table comparisons above show, the tax advantages for drivers opting for hybrid and electric company cars are clear to see.
Electric vehicles with a range above 130 miles qualify for a 1% BiK rate in the current tax year. In 2022/23 this will rise to 2%, where it will remain until 2025. In contrast, BiK begins at 22% for petrol vehicles and can reach 37% for diesel. Hybrid BiK rates sit between the two. A vehicle qualifies as a hybrid is it’s CO2 emissions are between 1 and 50g/km. The level of BiK is then calculated on electric range, ranging from 1 to 13% (21/2022).
What is BiK?
Benefit in Kind (BiK) is a tax on employees who receive benefits or perks in addition to their salary. Take the company car as an example. If an employee has a company car, which they use privately too, BiK will be deducted by their employer and paid to HMRC.
How is BiK calculated?
First, multiply a vehicle’s ‘P11D’ value (which is similar to its list price) by its BiK rate and then by the employee’s Income Tax rate.
There are huge gains to be made
These tax savings have encouraged drivers to take up the offer of a hybrid or electric company car, which offers a number of other advantages over receiving a taxable car allowance.
Reduced running costs
At around 2 to 3p per mile, electricity is two thirds cheaper than petrol and diesel. Plus Electric Vehicles costing less than £40,000 are exempt from Vehicle Excise Duty (VED), also known as road tax.
Improved access to affordable charging infrastructure
Buying and installing home charging solutions is now very affordable, which means businesses are in a position to equip drivers with the infrastructure to charge vehicles overnight.
Through the Electric Vehicle Homecharge Scheme (EVHS), the government will contribute up to 75% (to a maximum value of £350 including VAT) towards the cost of charging infrastructure and installation at domestic properties across the UK.
Public charging locations
Devices at these locations
Connectors within these devices
The charging options available to drivers out on the road are increasing too. There is an expanding range of fast and rapid chargers available across the UK.
And it’s never been easier to locate nearby charge points. For example, ZapMap is one of many tools built to help drivers find charging stations all over the UK and Ireland.
Access to ŠKODA partners
ŠKODA’s partnership with Octopus Energy means hybrid and electric drivers can charge up for less.
With Octopus Go, which is a 100% green electricity tariff designed for drivers, recharging between the hours of 00:30am - 04:30am costs just 7.5p/kWh. The result of this is fuel costs of around 2.5p per mile*.
**Fuel costs of approximately 2.5p/mile based on an ENYAQ iV 80 with a usable battery capacity of 78 kWh and a driving range of 333 , fully charged during the cheap charging window (correct as of 1st Jan 2022)
DISCOVER OCTOPUSEnvironmental considerations
Switching to low or even zero emission vehicles brings huge environmental benefits. And ultimately, this is why the government is encouraging their adoption.
Increasingly, manufacturers like ŠKODA, are also producing alternatively fuelled vehicles in an environmentally conscious way. The ENYAQ iV - built and delivered with a carbon-neutral balance - is a prime example. In addition, SKODA use lithium-ion batteries that are almost 100% recyclable.
Why choose a company car?
Along with the tax advantages of opting in, drivers also enjoy the traditional benefits associated with company cars.
> No unexpected costs - repairs, maintenance, servicing and insurance are all usually organised and paid for by the employer.
> No depreciation - company car drivers don’t own the vehicle so never need to worry about it depreciating.
> Flexibility - drivers aren’t tied into a long contract, which only lasts as long as they work for the company.
> New vehicles - company cars tend to be replaced every 3 to 4 years, meaning drivers get to experience the newest vehicles on the market.
The Key takeaway
Changes to vehicle taxation, which make alternatively fuelled company cars an attractive proposition for drivers, are proving key in the adoption of hybrid and electric vehicles.
As the transition to electric vehicles accelerates ahead of the 2030 ban on the sale of new petrol and diesel vehicles, this looks to be a structural shift in the fleet landscape, not a temporary trend.
Is a hybrid vehicle right for your fleet?
Let us help you decide.
ŠKODA iV-4-Fleet
With the ŠKODA iV-4-Fleet tool, we identify a fleet’s strengths and weaknesses, to support you in making an informed decision on whether your business is ready to switch to electric.
iV-4-FLEET
ŠKODA-iV-4-ME
Why not point drivers in the direction of our ŠKODA-iV-4-Me tool? This suggests the most suitable hybrid or electric vehicle to meet their needs.
iV-4-ME
Company Car Tax Calculator
eel free to share our Company Car Tax Calculator with your drivers. It will give them a detailed breakdown of how much BiK they will pay on our award-winning fleet range.
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