Car vs. Pick-up: Which is best for Company Car Tax?
If you are looking at getting a company car, then you might be considering which type of car you are going to get.
For example, have you thought about possibly getting a pickup as your next company car?
After all, some pickups are more luxurious than some cars on the market and we suspect that pickups are going to become a popular option for company cars in the future.
However, the way pickups are taxed is different to how company cars are taxed. So, which is better for company car tax?
In this article, we look at how they are both taxed, and look at some of the more luxurious pickups that are on offer to you.
How is a company car taxed?
Firstly, let’s look at how a company car is taxed.
A company car is taxed based on three things;
- The P11d value of the car
- Your personal tax band (either 20% or 40%)
- The amount of CO2 the car emits
The general rule is that the more CO2 your car emits, the more you have to pay in company car tax.
How to calculate company car tax
To find out how much company car tax you will be paying, you can do the following;
- Take the P11d value of the car
- The list price
- Delivery fees
- Road tax
- Any additional extras
- Multiply this by your company car tax rate – this total will be your benefit-in-kind rate (BIK Rate)
- Multiply your BIK rate by your personal tax rate
[vc_single_image image=”47926″ img_size=”article-image”]For example
Say your company car has a P11d value of £10,000 and a company car tax rate of 15%. This will give you a BIK rate of £1500. You then divide this by your personal tax band, so say it’s 20% that then gives you £300 a year in company car tax. See, it’s pretty easy. You can read more about calculating company car tax here.
Company car tax changes 2017
In 2016, the government announced some big changes to company car tax in the Autumn Statement.
These changes included the introduction of fifteen more BIK rate bands, eleven of which will be for low emission cars.
Currently (before April 2017), there are few BIK rate bands for low emission cars. This is essentially because the last time changes to company car tax came into effect, there weren’t that many low emission cars on the roads. However, this is no longer the case, and instead there are lots of low emission cars on the roads and not that much being paid in company car tax.
So, to counteract this, the government are introducing more bands for the lower emission vehicles. This makes it more even, but also more annoying for those driving low emission vehicles. You can find out more here.
Company car tax for pickups
[vc_single_image image=”49063″ img_size=”article-image”]Okay, so how about pickups?
Well, pickups can be considered vans. As long as they have a payload of one tonne (excluding the removable hardtop cover) then they can qualify as vans.
This means that pickups are taxed differently to cars. Why is this beneficial to you? Vans are taxed at a fixed rate, as opposed to a sliding BIK rate. This can then be reduced via certain criterion but we’ll go into more detail about that below.A lot of pickups are designed to qualify for van status, meaning that the chances are your desired pickup will qualify as a van in the eyes of the HMRC.
How is company car tax calculated for a pickup?
It’s much more straightforward than calculating company car tax for a car.
If you are using your pickup for private journeys
If you are using your pickup privately, such as travelling to the shops on the weekends, then you will pay a percentage of the BiK (Benefit in Kind) which is £3,150. The percentage depends on your tax bracket, so either 20% of £3,150 or 40% of £3,150. This can be reduced if;
- You cannot use the pickup for thirty days in a row
- You pay your employer to use the vehicle for private use
- Other employees use the van
- In which case, you divide £3,150 by the number of employees
If your employer is paying for your fuel, then you will have to pay £594 on top of the above amount. However, you can reduce this if;
- You don’t use the vehicle for thirty days in a row
- You pay your employer back the fuel you use privately
- Your employer stops providing fuel during the tax year
And that’s it. So, you can see why this could be more beneficial, particularly with the new company car tax changes. There might be an occasion where it is more financially viable to get a pickup instead of a company car. Therefore, it’s best to do your research on what will cost you more because you may be surprised.
What are the best pickups for a company vehicle?
For a long time, pickups were destined for American roads or some serious off-road driving here in the UK. However, that isn’t the case anymore, and pickups are becoming increasingly more luxurious. So, we take a look at some of the nicest pickups on the market today.
Mitsubishi L200 Pickup
This Mitsubishi looks good and drives well, on and off-road. It is also one of the most efficient pickups on the market today, returning over 40mpg.
The Toyota Hilux is known for its reliability and its ability to keep going, regardless of the situation. It’s comfortable and refined, and looks good inside as well. There are four trim levels available that offer different levels of luxury including things such as reversing cameras, cruise control and an infotainment system.[vc_single_image image=”49065″ img_size=”article-image”]
The Nissan Navara has been considered one of the best pickups on the market for a while, and it looks to stay that way. Nissan have said that the Navara straddles the ‘crossover SUV class’ driving experience and with leather seats and autonomous braking technology and a touchscreen sat-nav, we think it also straddles the crossover SUV market when it comes to luxury too.
[vc_single_image image=”48428″ img_size=”article-image”]If you fancy leather heated seats, 19-inch alloy wheels, front and rear parking sensors and chrome detailing, then the Volkswagen Amarok is the pickup for you. This is definitely one of the more luxurious pickups on the market but it doesn’t compromise too much on price or efficiency, returning around 36mpg.
The Ford Ranger has concentrated mainly on practicality in the past, but it’s now turned its focus to safety and technology in an attempt to keep up with its multi-purpose pickup rivals. And, it’s worked. It achieves 43.5mpg and comes with features such as a DAB radio, cruise control, leather interior and Ford’s SYNC2 voice control and touchscreen system.
If you want a more premium badge and a pickup that is about to change the face of pickups forever, then you should be looking at the Mercedes X-Class. Influenced by the Nissan Navara, the X-Class will be launched this year (2017) to much fanfare. It appears to have taken the interior from its executive saloons and placed it in this pickup, making it one of the luxurious pickups to grace the market.