Recent figures from HM Revenue & Customs showed that in 2006/2007 the number of benefit in kind company cars we are using, rose from 1.14 million in the previous year, to 1.16 million and that’s the first time we’ve seen any kind of year on year increase since the 2001/2002 figures.
There have been many opt out schemes in the past offered to employees and indeed, many took them up, but fact is, despite what you have to pay in BIK tax, the company car is still a pretty good benefit and there is just no way, you could run the same vehicle privately for anywhere near the amount you pay in tax.
Now maybe, it seems, employees are realising this, and if they are careful with the model they choose, the new CO2 based taxation system can see them driving a fuel efficient, low carbon producing modern aspirational car for a bargain basement BIK tax and certainly less than most employees are imagining its going to cost.
You’ve got to have some very special “cash allowance” scheme from your employer deal to outweigh the benefits of a company car, and that’s probably why over the past few years, many companies have been ending these schemes.
