Autumn Budget 2024 - this blog has now been updated with the new % rates moving from 13.8% to now 15% (November 2024).
For a Limited company that provides an employee a company vehicle, they must pay HMRC an annual one off payment of Class 1a National Insurance for providing an employee a taxable benefit in kind. For company cars, this is currently at the rate of 15% x the vehicle's Benefit in Kind charge (the benefit in kind charge is the list price of the car plus any extras less the road tax - then multiplied by the CO2 percentage for the car fuel type, from the HMRC's published company car tax tables).
In terms of the amount due, the level of payment actually mirrors the company car scenario ie the lower the CO2, the lower the Class 1a National Insurance that would be due, so this means diesel and petrol cars would have a high class 1a due, plug in hybrid electric vehicles (PHEV) would be 'middle of the road', then full electric would see the lowest amount out of all fuel types.
Examples below (as of 1/11/24) for the 2024/25 financial year:
1) Diesel
LAND ROVER RANGE ROVER SPORT DIESEL ESTATE 3.0 D300 Dynamic SE 5dr Auto 25 with metallic paint
| P11D value | £86,115 |
| CO2 | 191 g/km |
| Fuel Type | Diesel |
| Benefit in Kind | £31,862.55 |
| Class 1a NI due by company for the tax year |
(Was £4,397.04 at 13.8% rate) - now £4779.28 at new 15% rate |
2) PHEV (Plug in Hybrid electric vehicle)
LAND ROVER RANGE ROVER SPORT DIESEL ESTATE 3.0 P460e Dynamic SE 5dr Auto 25 with metallic paint
| P11D value | £94,040 |
| CO2 | 17 g/km |
| Fuel Type | Petrol plug in hybrid electric vehicle |
| Benefit in Kind | £4,702.00 |
| Class 1a NI due by company for the tax year |
(Was £648.88 at 13.8% rate) - now £705.30 at new 15% rate |
3) Full Electric
VOLVO EX90 ESTATE 300kW Twin Motor Ultra 111kWh 5dr Auto 25 with metallic paint
| P11D value | £96,200 |
| CO2 | 0 g/km |
| Fuel Type | electric vehicle |
| Benefit in Kind | £1,924.00 |
| Class 1a NI due by company for the tax year |
(Was £265.51 at 13.8% rate) - now £288.60 at new 15% rate |
So moving your company vehicles to a lower CO2 policy can save significant money on Class 1a National Insurance payments.
If you need more tax advice on your next company car you can ring 028 9693 6363 or email sales@everyvehiclelease.co.uk. Want to keep up to date on all things to do with contract hire? Sign up to our monthly news letter Newsletter Sign Up