If companies pick a diesel hybrid car, they will not be hit by the added 3% diesel Benefit in Kind tax surcharge.
The way the current rules in the company car tax system are means that quite often any potential savings are wiped out. This is because no matter what the emissions are of a diesel car it is subject to an additional 3% taxation.
Now however, it has been confirmed that the new diesel hybrid models coming from Citroen and Peugeot will not incur the added cost. This means that the cars will fall in to the 10% BIK tax bracket rather than the 13% bracket for the 2011/12 and 2012/13 tax years.
The diesel/hybrid technology will feature in the Citroen DS5, Peugeot 508 saloon, Peugeot 3008, and SW Hybrid4. The new ruling also applies to the Volvo V60 Hybrid coming shortly.
This means company car drivers could see significant savings. Choosing a Peugeot 3008 2.0 e-HDI HYbrid4 with the 10% taxation will cost £539 per year and £45 per month on the 20% tax rates. If the model were to be based on the current system for diesel models it would cost £700 per year and £58 per month on the same tax rate. That’s a saving of £161 per year.
Peugeot Fleet Sales Director, Phil Robson, said: “The clarification by HM Revenues & Customs that customers with our HYbrid4 cars will not incur the 3% diesel surcharge, and benefit from the 10% threshold for personal BIK taxation, is excellent news. It is the final piece in the HYbrid4 jigsaw and means that businesses will benefit from the best possible environmental and fiscal position.”
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