Company Director BIK for Hybrid

[AndyC_123]

Morning all

I've always used our company commercial vehicles (business use only obviously...) so had no BIK to pay.

Business is going quite well so thinking about treating myself and from what I'm reading it will be quite tax efficient to get a hybrid - thinking along the lines of a 2 or 3 year business lease deal on a Range Rover/Range Rover Sport.

Does anyone else do this? Anything I'm missing/should I be looking at something else?

Probably can't go fully electric due to local infrastructure (oop north). Is there any BIK difference between diesel hybrid and petrol hybrid?

I've never leased a car before but if I was to get something like a RR there is no way I'd run it without warranty, so handing it back sounds ideal.

Costs (roughly) look like about £8,500 down and £1400/month. I'm presuming the business pays this? and I pay 5 or 6% BIK via my pay cheque?

Thank you

[RicksAlfas]

This is a good tool:
https://comcar.co.uk/companycar/tax/select/

Try different cars and see what's what.

[M1AGM]

RicksAlfas said:

This is a good tool:
https://comcar.co.uk/companycar/tax/select/

Try different cars and see what's what.

The table they have here:

https://comcar.co.uk/taxpages/carbenefitcharge/

Details the electric range to qualify for the lower BIK. The RR products do.

Noticed that from 2028 (April?) BiK shows a massive increase? Wasnt aware of that.

[Greatesthit12]

Did the same myself, the BIK is not bad at all. Also we drive 95% of trips on the battery only and it is so nice, silent and very smooth.

I test drove both and strongly recommend going for the 'full' Range Rover and not the Sport, it's a completely different car, and well worth any extra cost (which isn't normally that much of a difference for how much more car you're getting).

I spent a long time finding the best deal, and found going for a stock car at Rockar Canary Wharf worked very well. I did 1 month down with a 3 year contract on a HSE. Black outside, silver accents (didn't want a blacked out car), and beautiful white interior which I love. Very happy with it, wonderful car.

Here's the link for their stock that they sent me before.
https://bit.ly/4aIZ8bL


Once my contract is over - ends just before the BIK spike - then we will try to get the upcoming BEV model.

[russy01]

I do exactly this, but chose a BMW X5 50e. Nice large sporty suv - but didnt want the image/perception of a brand new range rover rocking up or sitting outside my premises.

X5 is 8% BIK, Sport is 5% BIK.... plus if you charge at work you save that cost too! My commute is all paid from company electric...

Be careful though as this benefit is coming to an end soon, along with the super expensive EV cars! Its either '28 or '29 and the BIK rate jumps up 10%...

Im just renewing my X5 for another 3 years until this happens - then after that it will probably be cheaper to PCP a big diesel SUV - as the BIK payments will be >£500pm.

[AndyC_123]

Thank you all, very insightful.

Newborn will be in the back so I'm expecting the rear of the "proper" range rover to be a bit wasted with a baby seat? Wife also prefers the sport apparently... I'll have a look at the BMW too, thank you.

I'm also thinking about contract hire rather than buying (first time I've ever done it) - cost over 3 years is about £42k which I'm thinking will be similar to the depreciation?

Am I right in thinking the company will be £1100 (ish) per month which will be tax deductible? And on top of that I have to pay the 6% BIK as part of my pay cheque? Accountant is on holiday.

[russy01]

AndyC_123 said:

Thank you all, very insightful.

Newborn will be in the back so I'm expecting the rear of the "proper" range rover to be a bit wasted with a baby seat? Wife also prefers the sport apparently... I'll have a look at the BMW too, thank you.

I'm also thinking about contract hire rather than buying (first time I've ever done it) - cost over 3 years is about £42k which I'm thinking will be similar to the depreciation?

Am I right in thinking the company will be £1100 (ish) per month which will be tax deductible? And on top of that I have to pay the 6% BIK as part of my pay cheque? Accountant is on holiday.

I do the same with the cost comparison to depreciation - plus remember the deal will roll in RFL which can be expensive when buying personally. You can get a service/Maintanence pack too (some includes tyres). We drive the 50e hard so get through a set of tyres in a year and at 315 section at the rear they are £££ - so they maintenance can workout well depending on your circumstances.

£1100 sounds about right, I pay similar. Something like can only clam 50% of VAT at used personally too. I'll let the accountants answer this..

BIK basically increases your earnings - so you pay income on the calculated amount. So a RR sport hybrid attracts a 6% BIK rate, times this by the P11d (RRP) and this amount tacks on to your earnings.

e.g £100k car, 6% rate = £6,000 benefit. So, depending what rate you pay it will either be 20%, 40% or 45% of the £6k PA. Many quote this as a monthly figure to show company car owners how it will affect their monthly take home.

[AndyC_123]

russy01 said:

I do the same with the cost comparison to depreciation - plus remember the deal will roll in RFL which can be expensive when buying personally. You can get a service/Maintanence pack too (some includes tyres). We drive the 50e hard so get through a set of tyres in a year and at 315 section at the rear they are £££ - so they maintenance can workout well depending on your circumstances.

£1100 sounds about right, I pay similar. Something like can only clam 50% of VAT at used personally too. I'll let the accountants answer this..

BIK basically increases your earnings - so you pay income on the calculated amount. So a RR sport hybrid attracts a 6% BIK rate, times this by the P11d (RRP) and this amount tacks on to your earnings.

e.g £100k car, 6% rate = £6,000 benefit. So, depending what rate you pay it will either be 20%, 40% or 45% of the £6k PA. Many quote this as a monthly figure to show company car owners how it will affect their monthly take home.

Spot on, thank you.




I presume that people have started putting supercar hybrids through the books now?

[ntiz]

russy01 said:

I do the same with the cost comparison to depreciation - plus remember the deal will roll in RFL which can be expensive when buying personally. You can get a service/Maintanence pack too (some includes tyres). We drive the 50e hard so get through a set of tyres in a year and at 315 section at the rear they are £££ - so they maintenance can workout well depending on your circumstances.

£1100 sounds about right, I pay similar. Something like can only clam 50% of VAT at used personally too. I'll let the accountants answer this..

BIK basically increases your earnings - so you pay income on the calculated amount. So a RR sport hybrid attracts a 6% BIK rate, times this by the P11d (RRP) and this amount tacks on to your earnings.

e.g £100k car, 6% rate = £6,000 benefit. So, depending what rate you pay it will either be 20%, 40% or 45% of the £6k PA. Many quote this as a monthly figure to show company car owners how it will affect their monthly take home.

Don't forget to add on 5,000 for fuel allowance on to the BIK.

I have run company cars this way for a while OP it is pretty efficient you can claim back half the VAT on the lease as well. Obviously you are spending your pre tax profit so less corporation tax.

If you looking at BMW the new M5 touring has a very low CO2 and BIK if you want something sportier

Unfortunately the supercars still have relatively high CO2 figures under 30 with 50 miles range is where you need to be. The supercars are still way over 100 CO2 so get hit with a high enough BIK that it wouldn't make sense. Unfortunately the tax man is rarely stupid.

Edited by ntiz on Wednesday 14th May 12:52

[russy01]

I ordered the new M5 to replace the X5! Great opportunity to get a car like that with 8% BIK!