A Tax Efficient Company Car
In recent years the government has changed the way that company cars are taxed. They have been trying to encourage more people to be environmentally friendly. Consequently, the higher a car’s CO2 emissions, the higher your tax bill on the benefit in kind, and the lower the capital allowances that are available for the company.
With this in mind, Mitsubishi has recently launched the Plug-in Hybrid Electric Vehicle (PHEV) version of its all new Outlander. This vehicle comes with some impressive green credentials, only producing CO2 emissions of 44g/km and achieving a mightily impressive 148mpg.
The fact that this vehicle has such low emissions makes it the ideal company car.
In the year of purchase, the company would be able to claim back 100% of the cost of the vehicle against its tax bill.
The benefit in kind rating against the employee is only 5%. This means that an employee paying tax at basic rate would only pay £596 in tax for the use of the vehicle and fuel purchased during the year. As you can see from the table below this easily outstrips its nearest rivals:
|Tax payable on benefit||Mitsubishi Outlander GX4h Auto||BMW X3 Xdrive SE Auto||Audi Q3 S-Line Plus Auto||Mercedes E-Class SE Estate Auto|
|At basic rate||£596||£2,575||£3,040||£2,770|
|At higher rate||£1,192||£5,150||£6,080||£5,540|
If you currently live in London or travel there frequently, there is also the additional good news that the Outlander PHEV is registered as congestion charge exempt, allowing you to travel through London free of charge.There are also grants currently available on the purchase of this vehicle. You will be able to get a grant of £5,000 against the initial cost of the vehicle. British Gas are also currently able to install high speed chargers at your home, so that you would be able to take advantage of cheap Economy 7 electricity by charging your vehicle overnight.
Do you have any queries about company cars? Here at Green & Co, we are more than happy to help you.
Should you wish to read more about the new Mitsubishi Outlander PHEV, please visit the website.
Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.