EV company car - tax code change

Catamarca

Apologies if this has been asked before - I can’t find a thread that answers it though.

I got a new company car in December, a change from diesel to EV. I could have taken a cash allowance as an alternative. I know there was a change to the tax treatment on company cars a few years to ensure that if there is a cash allowance option and you choose the car, you pay the higher of the BIK tax amount or income tax on what the cash allowance would have been. I had understood EVs were exempt and taxed on the basis of BIK only - a calculator on the lease company’s site certainly backs this up.

Got a tax code notification today and my benefit is precisely the amount of the cash allowance I didn’t take.

Can anyone confirm how this benefit is taxed? If you have a company EV but could have opted for cash are you paying tax based on BIK?

Grumpy_chap

If you choose a ULEV vehicle (75g/km CO2 or less) which an EV is, then the BIK is based on the car and the car allowance value is not considered.

I suspect the car has simply not been correctly reported to HMRC so the revised tax code fails to take into account the status of the vehicle chosen.  This should be corrected when you P11D is available, which you should have by 6th July latest.

https://www.clm.co.uk/company-car-tax/#cashalternative