If you have read up on the changes to company cars, then you are probably thinking of investing in a plugin hybrid as your next company car. If you are unsure of the new changes, don’t panic, we explain them below.
Plugin hybrids are one of your best options if you are looking for low company car tax, and to avoid the salary sacrifice changes we are going to discuss below.
But, which plugin hybrids are best? It should be noted here that this article is about plugin hybrids only, you can read our article on the best non-plugin hybrids here.
What is the difference between a plugin hybrid and a standard hybrid?
There are a few differences between a plugin hybrid and a standard non-plugin hybrid and it’s important to distinguish between the two.
A standard hybrid uses electricity when the car is at low speeds. If the car speeds up, then it will switch to petrol/diesel. If the hybrid needs a bit of a boost, getting up a hill for example, then it will use both electricity and fuel. The hybrid recharges itself as you use the fuel and/or while braking or slowing down, meaning you don’t have to charge it yourself.
A plugin hybrid, however, uses its electricity differently. A plugin hybrid will run on electricity for as long as possible. When it reaches the set battery limit, it will switch to either petrol or diesel. For this reason, you have to charge it up either at home, or via charging points in public.
Which is better for low company car tax; a plugin hybrid or a non-plugin hybrid?
If you want a car that is lowest for company car tax, then your best bet is the plugin hybrid. This is because they emit less CO2 emissions. Many plugin hybrids emit less than 75g/km of CO2, which also means they are exempt from the salary sacrifice changes, if these apply to your employer.
Salary sacrifice changes 2017
As of April 2017, salary sacrifice schemes (if your employer offers this scheme) will no longer receive the tax benefits they have done in the past.
Salary sacrifice schemes, such as gym memberships and mobile phone contracts, were subject to less tax than their cash equivalent (if they were taxed at all). However, this will no longer be the case after the government announced a serious shake-up of the schemes in the Autumn Statement 2016. This means that company cars will now be taxed on whichever is higher; the cash equivalent, or the BIK rate.
The only exception, after much lobbying, is ultra-low emission vehicles. These will be exempt from these changes, and will continue to be taxed as per the BIK rates.
The good news is, plugin hybrids are classed as ultra-low emission vehicles. Which means that they will be taxed as per their BIK rate. So, we suspect plugin hybrids will become increasingly popular over the next few years.
Pretty much all plugin hybrids will be good for company car tax as they are low on CO2 emissions. Though there are some plugin hybrids that are better than others. So we’re going to take a look at the best ones.
Volkswagen Golf GTE
The Volkswagen Golf is always a safe bet, regardless of whether you choose its standard, hybrid or full electric form. It’s great to drive, reliable, and won’t cost you the earth. It will drive on fully electric for about thirty miles, so this is great for those who have a shorter daily commute, as it means they will have to fill up much less.
Volvo V60 Twin Engine
If you’re looking for a slightly more premium car that is also good value, then the Volvo V60 is a plugin hybrid you should definitely be looking at. Interestingly, it’s actually a diesel plugin hybrid which is pretty unusual for a plugin. However, it does mean that it is perfect for employees who will be doing much longer journeys.
Mitsubishi Outlander PHEV
The Outlander is Mitsubishi’s best-selling plugin car and it’s easy to see why. It’s pretty chunky, and might not have been everyone’s first choice for a company car, but with an all-electric range of 32 miles and the ability to use rapid charging points, it’s a serious contender. It can also be specified as a van, which will be an appealing trait for some.
Mercedes-Benz C 350e
One of the few premium badges on our list, the Mercedes-Benz C 350 e is a perfect low emission, executive car. Its electric range isn’t too great at only 20 miles, but it does come with some pretty tech savvy equipment. This includes a sat-nav that lets the car decide when best to use battery charge for maximum efficiency.
Audi A3 e-tron
BMW i3 REX
The BMW i3 REX is part electric vehicle/part plugin hybrid. The petrol engine does not run the car, but instead acts as an on-board generator for the electric battery. Because of this, the i3’s emission figures are much lower than its fellow plugins. Its looks are divisive though, and it is smaller than some of the other premium cars we have on this list. However, if you’re looking for a quirky looking, efficient car, then you don’t have to look much further than the i3.
This isn’t an exhaustive list of the plugin hybrids available to you. However these are the ones that we think would be suitable company cars, and that they represent the wide range available to you. However, there are going to be more and more plugin hybrids on the market. So, to stay up-to-date, check out our search function to see all options available to you.