If your employer provides you with a car that’s available for private journeys, it’s classed as a benefit-in-kind – a term that applies to a broad spectrum of workplace perks – and taxed out of your monthly pay packet. Depending on the car you choose, this can be cheaper than buying or leasing privately.The amount you pay is based on the vehicle’s taxable value. This is a percentage of its list price, which gets progressively larger for cars with higher CO2 emissions.
Ultra-low tax bands for EVs – which are rated at 0g/km CO2 – were reintroduced in April 2020, and the taxable value for these cars is currently frozen at 2% of the list price until April 2025. The taxable value for these cars is just 1% of the list price until April 2022, then 2% for the following three financial years.
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