Like it or not, the chances are you will have to pay company car tax. If you have a company car then you will probably end up paying company car tax.
However, the way company car tax is calculated depends on what type of vehicle you drive.
For example, what about company car tax for a pickup?
In this article, we look at how company car tax for a pickup is calculated, and some of our top pickup picks.
Can I use a pickup as a company car?
Yes, you can. If you want to get a pickup as your next company car then there’s no reason why not. However, you’ll want to make sure that it meets the following criteria;
This is the criteria it must reach to be classified as a Light Commercial Vehicle. The good news is that many four-door, four-seat pickups meet these requirements.
Although it’s unusual, pickups can make great company cars, and we suspect that they will become a popular option in the coming months and years.
How is company car tax calculated for a pickup?
The reason we think pickups will be more popular over the coming years is because if your pickup meets the above requirements it will be taxed as a van.
Because it will be taxed as a van it means that it will be taxed via a fixed BIK rate.
This differs to a company car as a company car is taxed via a sliding BIK rate based on the CO2 emissions, your personal tax bracket and the P11d value of the car.
Instead, you will simply be taxed a fixed amount that can be reduced via a certain number of things, which we will go into detail about below.
How to calculate company car tax for a pickup
Now we know that pickups class as vans and thereby taxed via a fixed BIK rate, how do you calculate it?
Pickups and private journeys
If you are using your pickup for a private journey (such as using it at weekends) then you will have to pay a standard value of £3,150. This can be reduced, however, if;
- Your employee pays you privately to use the pickup
- Your employee can’t use the vehicle for thirty days in a row
- Other employees use the pickup – in which case, the £3,150 will be divided by the number of those driving it.
Pickups and private fuel
If you are paying for your employees private fuel, then you will need to pay £594 as standard. You can reduce this if;
- The employee can’t use the vehicle for thirty days in a row
- They pay back their private fuel
- You stop providing fuel during the tax year
So, say if you pay for your own private fuel and you use your pickup for private journeys then you will have to pay just a percentage of the £3,150. For example, if your personal tax bracket is 20% then you will have to pay 20% of £3,150 a year which is £630 a year or £52.50 a month.
Are there exemptions to company car tax for pickups?
As with a lot of things, there are exemptions to the rule. The only exemptions for pickups is if they are not used for private journeys.
You do not have to pay company car tax on your pickup if;
- It is available to each employee so they can do their job properly
- It isn’t normally kept at or near an employees’ home
- The pickup is available to use and is used by more than one employee
- The pickup is only used for business journeys
- With the exception of limited personal use. For example, if you need to take the vehicle home at the end of the day to get an early start tomorrow.
There are no zero-emission pickups on the road as yet, so naturally, there are no exemptions for that. However, word on the street is that there will be some zero emission pickups on the market as early as 2018. In which case, they will be taxed the same as a zero emission van which is a fixed value of £630.
What are the pros and cons of having a pickup as a company car?
Now we’ve established how company car tax for pickups are calculated, what are the pros and cons of having a pickup as a company car?
Some of the advantages of having a pickup as a company car are;
- They are practical
- This is quite an obvious one but if you need a company car that can double up as a practical family car then a pickup is a great choice
- Some of them are pretty luxurious
- Pickups have really upped their game as of late. Some pickups are just as luxurious, if not more, than some cars. Plus, they tend to come with a lot of technology and a heap of safety equipment
- They are taxed as vans
- This one is also obvious but pickups can be expensive and they emit quite a bit of CO2. This means that if they were taxed as a car, you’d be paying considerably more. But, as they are taxed as a van, it’s an absolute bargain.
But, there are disadvantages. For example;
- They are big
- If you’re looking for a company vehicle that can whip round the streets of London then a pickup probably isn’t for you
- They don’t drive as well as some SUV’s
- 4×4’s are still winning when it comes to drivability. That’s not to say they aren’t still great to drive, it’s just that if performance is your main concern, you might want to look elsewhere.
- They emit quite a bit of CO2
- Unfortunately, there is no ultra-low emission pickup…yet. There could well be in the future. But, if eco-friendliness is the most important thing for you when it comes to a company car then a pickup probably isn’t for you.
So hopefully this has given you some idea of how company car tax works for a pickup. We’ve also gone through the pros and cons of having a pickup as a company car. But, for more information, you can read our article on why we think your next company car should be a pickup. Or, you can take a look at some of our best pickups for company cars.
- Benefits of business car leasing - 13th April 2021
- Things businesses should consider before hiring a Fleet Manager - 12th April 2021
- Tax benefits and implications of business car leasing - 8th April 2021