Q. I’m in the fortunate position of being promoted this year, despite the effects of COVID-19 on our company's trade. Now that we are starting to recover from the lockdown restrictions, I’ve been told that I can choose a company car, subject to an overall spending threshold (including optional extras). Am I right in thinking that as long as the emissions don’t exceed a certain threshold, there won’t be any taxable benefit?
A: Whilst low emission vehicles have always attracted relatively favourable tax treatment for income tax purposes, I'm afraid there is no longer any possibility of a zero benefit in kind treatment for any vehicle provided by an employer available for private use. The most tax-efficient option is to choose a wholly electric vehicle, but even this will attract a charge of at least 1% of the list price.
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