Company Cars 2025/26
Getting the most from the low-tax regime
Choosing a company car isn’t just about style or performance—it’s a strategic financial decision that should align with your broader business goals. This Special Report is your go-to guide for navigating complex tax rules and making informed, cost-effective vehicle choices. Whether you're overseeing a fleet or selecting a single car, this report empowers you to cut costs, stay compliant and maximise long-term benefits.
Inside, you’ll find a comprehensive breakdown of key tax regulations, including benefits –in kind, capital allowances and VAT. With clear explanations and actionable advice, you’ll be equipped to plan and avoid expensive surprises. Thinking about electric or hybrid vehicles? Discover how low-emission options can significantly reduce your tax burden while enhancing your sustainability profile.
Still weighing up whether to buy or lease? Our buy vs lease analysis lays out the financial pros and cons of each route, helping you choose what’s best for your business. We also uncover the common tax traps that cost companies thousands—and show you how to sidestep them with confidence.
The report features real-world scenarios that illustrate how different decisions play out, backed by expert insights. Plus, our future-proofing tips ensure you stay ahead of upcoming tax changes and make choices built to last.
The right company car strategy can help you legally reduce your tax bill, align vehicle decisions with business objectives, and enhance employee perks without inflating costs. In a shifting tax landscape, this Special Report is your roadmap to smarter, more strategic decisions.
| Type of product | |
|---|---|
| Identifier (EAN / ISSN / Action Code) | 9781911744320 |
| Availability | In stock |
| Publisher | Lefebvre UK |
| Publication Date | May 23, 2025 |
Table of contents
1. Using this Report to save tax
1.1. Tax is now a key factor in choosing a company car
1.2. How do you get the most from the current company car tax regime?
2. Cars and vans - tax treatment at a glance
2.2. Tax charges for private use
3. Choosing a company car - the tax and NI implications
3.1. What factors are used to work out company car tax and NI?
3.2. What’s the maximum taxable amount of car benefit?
3.3. How does fuel type affect the tax bill?
3.4. How long will the low tax incentive for electric and hybrid cars apply?
3.5. Can the age of the car affect tax and NI bills?
3.6. Where can I find the CO2 figures?
3.7. How is the tax calculated?
3.9. How do accessories affect the tax charge?
3.10. Are there any special factors that affect the calculation?
3.11. What are classic cars and how is the car benefit calculated?
3.12. How is the car benefit worked out for older cars and those without an emissions figure?
3.13. What are company “pool cars”?
3.14. What counts as an incidental journey?
3.15. What’s the tax position for a second or subsequent car?
4. Choosing a company van - the tax and NI implications
4.1. Is there a tax advantage to driving a van instead of a car?
4.2. What’s the difference between a car and a van?
4.3. What’s the taxable amount for private use of a company van?
4.5. Examples of use which is insignificant
4.6. Examples of use which is not insignificant
4.7. Is there a tax charge for fuel for vans?
4.8. Is there a lower tax charge for electric vans?
5.1. How is the car fuel benefit amount worked out?
5.2. Is there a car fuel benefit for electric cars?
5.3. When is a company car fuel benefit charge triggered?
5.4. How can the car fuel benefit charge be avoided?
5.5. How is the “making good” amount worked out?
5.6. Are there other conditions for making good?
5.7. What if the employee pays for fuel used for business journeys?
5.8. What’s the position if a business pays for charging an electric car for private mileage?
6.1. What makes a vehicle a car for VAT purposes?
6.2. How does VAT affect company cars?
6.3. Does my business have to charge VAT when it sells a company car?
6.4. Can VAT paid on running costs be reclaimed?
6.5. What are the rules for reclaiming VAT on car fuel?
6.6. Can VAT be reclaimed on the cost of car accessories?
6.7. Are there any VAT consequences of using a company car for private journeys?
6.8. Are there VAT consequences of using a company van for private journeys?
6.9. What are the rules for leased cars?
7.1. What are the general rules for tax deductions?
7.2. How are capital allowances calculated?
7.3. How can capital allowances for cars be accelerated?
7.4. How are tax deductions given for rented or leased cars?
7.5. What type of contracts do the lease rules apply to?
7.6. Are there tax deductions for other costs of buying a car?
7.7. What’s the tax position when a company car is sold or a lease ends?
8. Privately owned cars and business use
8.1. What is a mileage allowance payment?
8.2. What is an authorised mileage allowance payment?
8.4. What’s the maximum allowance that can be paid?
8.5. Is a mileage allowance tax deductible?
8.6. What’s the tax position for MAPs?
8.7. Can an extra mileage allowance be paid for passengers?
8.8. Should MAPs be declared on personal tax returns?
8.9. Can a tax deduction be claimed where MAPs are received?
8.10. Are there any VAT consequences related to MAPs?
8.11. How do mileage allowances work for the self-employed and business partners?
9. Miscellaneous tax issues for cars
9.1. Can we use a salary sacrifice arrangement for a company car?
9.3. Is paying for parking a taxable benefit in kind?
9.4. An employee has incurred a parking fine. What’s the tax position if we pay it?
9.5. What about speeding fines?
9.6. Can any tax-free mileage allowances be paid to company car drivers?
9.7. How should employees claim a tax deduction for business mileage?
9.8. Is the cost of a personalised registration number tax deductible?
9.9. What about the VAT on a personalised number plate?
9.10. Does a personalised number plate count as a benefit in kind?
10.1. Appendix A - Company car taxable benefit amount
10.2. Appendix B - Annual taxable benefit versus taxable benefit for transfer of car
10.3. Appendix C - Tax on car accessories which are part of the main company car tax calculation
10.4. Appendix D - Capital allowances for company cars
10.5. Appendix E - Accelerating capital allowances for cars
10.6. Appendix F - Flat rate for mileage
10.7. Appendix G - Tax deductibility of parking fines levied by businesses and private landowners