Company Car Tax

Due to the impact of the tax regime on company cars, it is generally not sensible to have a company car.

The options to consider are:

• Use your private vehicle for company travel, claiming tax relief for business mileage at the rate of 45p for the first 10,000 miles and 25p for additional mileage.
• Have a company van. This could be a single cab pickup (double cab pickups no longer work, as they are now taxed as cars). The company could claim 100% capital allowances on the cost of vans. Proceeds on disposal of the van would be taxable. All expenses of the van would be claimed against the company’s profits. If the van was used for private travel, then a benefit in kind would be taxable. From 6 April 2026, the van benefit in kind is £4,020 and the fuel benefit is £769. For basic rate tax payers, this would result in £958 of personal tax being payable. The company would also have to pay 15% NIC on the benefit.
• If the company purchased a fully electric car, then car benefit would apply (there would be no fuel benefit). Benefit in kind would be based on 4% of the list price for tax year 2026/24, rising to 9% by 2029/30. The list price is effectively the RRP of the car when it was new. The company would need to pay employers NIC at 15% on the benefit in kind. If the electric car was a new car, then the company could claim 100% capital allowances on the purchase cost. Proceeds on the sale would be taxable. If the car was not new, then capital allowances would be significantly restricted.