HM Revenue & Customs (HMRC) has published its annual statistics on company cars provided as benefits in kind (BIK) to employees. The number of employees paying company car tax has stayed the same as the previous year, showing a recovery after a period of declining figures.
Commenting on the figures, Toby Poston, BVRLA’s Director of Corporate Affairs said;
“It is encouraging to see the slide in company car numbers has finally been arrested. We know that company-provided vehicles are cleaner, greener and safer, playing a crucial role in the UK’s decarbonisation efforts. The latest HMRC figures show the direct benefits of having a fair taxation system in place.
“The BVRLA secured more years of clarity on company car tax rates last November, giving a financial incentive to support the wider desire to ‘go green’. That will continue the trend back into company cars, helping more drivers and companies ditch their older, dirtier vehicles.”
Key points for company car and fuel benefits in tax year 2021/2022 are:
- the total number of reported recipients of company car benefit was 720,000, the same level as in the previous year. This figure had been in steady decline from 960,000 in 2015/2016
- the total taxable value of company car benefit was £3.95 billion in tax year 2021/2022 down from £4.62 billion in 2020/2021
- the number of reported fuel benefit recipients was 50,000 in 2021/2022 down from 60,000 the previous year continuing a downward trend. The shift towards electric powered cars is expected to be in part behind the decline in fuel benefit use
- in tax year 2021/2022, only around 2% of company cars had reported CO2 emissions in excess of 165 g/km. By contrast in 2002/2003, 58% of company cars had reported emissions in excess of 165 g/km
- the average reported CO2 emission of company cars including electric cars was 86 g/km, compared to 99 g/km in the previous tax year. For cars with internal combustion engines the average was 103 g/km
- diesel cars account for just over one third of company cars in 2021/2022 following a steady decline from 80% of company cars in 2017
- the number of reported recipients of company cars with CO2 emissions of 75g/km or less was 243,000 (up from around 137,000 in the previous tax year). Fully electric cars account for 17% of car benefit recipients
- the total taxable value of all Class 1A taxable benefits in kind was £8.6 billion, a decrease of £0.4 billion from the previous year.
HMRC says that reporting issues brought about by voluntary payrolling, introduced in 2016, may mean there is a "substantial number of individuals" in recent years who received a company car that, while taxed at payroll, was not properly reported to HMRC. The appropriate tax was collected but the car benefit not recorded.
Benefits in kind statistics: June 2023 - GOV.UK (www.gov.uk)
