Taxation of Company Vehicles

Benefit in kind tax is charged on cars supplied to employees by employers. Tax is calculated by mulitplying the  list price of cars by a percentage, which is dependent upon the CO2 emissions of the car.

For electric cars, for tax year 2024/25, the benefit in kind is set at 2% of list price. This increases at the rate of 1% a year until 2027/28, when the relevant percentage becomes 5% of list price. In the budget, it was announced that the percentages will be 7% for 2028/29 and 9% for 2029/30. Electricity supplied for charging electric vehicles by an employer, does not attract a benefits in kind tax.

Electric vans attract no benefit in kind.

For hybrid cars with CO2 emission of less than 50 and an electric range of at least 130 miles, the car benefit in kind is the same as an electric car until 2027/28, although there will be a fuel benefit where the employer provides fuel. For 2028/29 the relevant percentage becomes 18% in 2028/29 and 19% in 2029/30.

Car fuel benefit for 2023/24 is based on the relevant  CO2 derived percentage, multiplied by £27,800.