At first sight, company car drivers whose private fuel costs are met by their employers may seem to be onto a good thing, but there is a nasty tax. Enter, the Car Fuel Benefit charge.

This article does not cover the risks of owning an electric car, depreciation rates etc. Instead it discusses the tax implications if you buy an electric car for business purposes.

When an employee or director has use of a company car, they are subject to benefit in kind tax. The amount of tax payable depends on the car’s value when new, and the CO2 emissions it produces. Therefore, an employee with a 1.2l petrol Toyota will pay much less tax than one with a 2.0l diesel Audi. 

The advisory fuel rates are changing from the 1st March 2019.

The advisory fuel rates are changing from the 1st March 2019.

Generally speaking, the purchase of any vehicle where there is any element of private use means any reclaim of VAT may be restricted. HMRC’s website offers the following guidance:

Generally speaking, the purchase of any vehicle where there is any element of private use means any reclaim of VAT may be restricted. HMRC’s website offers the following guidance:
 

Generally speaking, the purchase of any vehicle where there is any element of private use means any reclaim of VAT may be restricted. HMRC’s website offers the following guidance:
 

New rules for car tax (Vehicle Excise Duty) come into force this year and unfortunately, it can mean a substantial hike in tax for some drivers if your car was first registered on or after 1 April 2017, especially if your car is a diesel vehicle. 

New rules for car tax (Vehicle Excise Duty) come into force this year and unfortunately, it can mean a substantial hike in tax for some drivers if your car was first registered on or after 1 April 2017, especially if your car is a diesel vehicle.