If you’re looking for the most cost-effective company car, don’t forget the role that fuel economy should play in your decision.
A company car driver will often focus only on the cost of benefit-in-kind taxation. However, this might lead to a higher overall cost when private fuel costs are taken into account.
The below example compares a petrol and a diesel model with the same P11D value.
Although the petrol car offers lower benefit-in-kind taxation, when we consider the cost of private mileage, diesel is the lower cost option.
|BiK 2019/20 tax year||27%||28%|
|BiK 2020/21 tax year||28%||29%|
|BiK 2021/22 tax year||28%||29%|
|Total BiK tax (20% taxpayer)||£4,150||£4,300|
|Annual private mileage||7,500||7,500|
|Fuel price / litre (p)||125.9||133.9|
|Total fuel cost||£2,894||£2,569|