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A list of the most tax-efficient company cars you can buy in the UK.
Over recent years, the act of giving employees a company car, a vehicle that staff members can use to travel to work and visit clients, has risen and grown.
Many prospectus employees see a company car as a core benefit that a larger organisation must offer to be seen as an excellent workplace. They will likely apply for a position that offers this over a business that doesn’t, meaning that it’s essential that companies provide the right kind of vehicles.
When looking at standard car models that are often used as company cars, you may notice that these vehicles share a lot of traits and similarities. They are efficient, stylish, and have good technology and features to make commutes and business trips more bearable.
However, above everything else, a good company car will be a vehicle that has low emissions so that they are less expensive to tax. This is important for a company car because the lower the tax, the less an employee has to pay out of their salary towards the vehicle, helping to save them money.
Thankfully, many great vehicles can make good company cars, although some are far greater than others. To help you choose the right cars for you and your business, here’s our Car Adviser list of the top 10 company cars for tax purposes in 2024.
If you’re looking for different kinds of cars or cars that better suit other situations, we also have plenty of other lists that you can find here on Car Adviser.
The BMW 3 series is already a well-renowned saloon car and has always been an excellent option for working professionals over the years as it oozes class and elegance. However, past iterations may not have been the most economically viable.
With BMW now offering an electric version of the 3 Series, getting one as a company car is a no-brainer, as you’ll be able to experience all the features that make BMW great and enjoy low emissions and costs.
Despite being a hybrid option, this BMW 3 Series is still incredibly fun to drive, offering great power and tight handling. It cruises well on the motorway and is firm and controlled, making it a comfortable vehicle to drive often.
There’s a lot of interior space in the vehicle, so you won’t feel crammed in, although boot space may be an issue that makes it less practical. This is because the hybrid battery is stored under the boot, compromising how much you can store there.
Being a Hybrid vehicle, the 3 Series 330e has a good BiK rate, which is a score that influences how much tax you have to pay on the car. With a 10% BiK rate, it’s far better than a regular BMW 3 Series, which can usually be up to 37%.
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If you’re looking for a cheap company car, one of the best options is Volkswagen ID.3. This entirely electric car focuses on comfort and practicality.
Unlike many of the staple company cars, this is a hatchback, not a saloon or coupe, meaning there’s much more storage space than usual, which can be great if you need it for long business trips.
With a BiK rate of next to nothing, you’ll be paying very little out of your salary to drive this car for work, making it a very sensible option.
That said, this car is sensible in various aspects, as it’s got great safety features, has excellent interior room for the driver and passenger and has a great range on a single charge as well.
It’s not the fastest car you can get and may feel a bit sluggish and lifeless when trying to build up speed. It’s also not the flashiest, so it may not be a good choice if you want a company car that excites and screams success and elegance.
It’s also a car that relies on touch screens for its controls, so there may be better options for drivers who prefer something a bit more tactile and less fiddly.
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Tesla is a trendy electric car brand, and currency sits as the market leader among these types of vehicles. As a result of its prestige and reputation, Tesla cars have become a great option to have as a company car, especially as their electric technology makes them very cheap to pay for.
One of the best models you can currently get is the Model 3, a futuristic yet minimalist saloon car. Although not the most spacious option, there’s still plenty of room for a passenger, and it also gives you insane mileage per charge, which frankly changed the game when this car first came out.
Of course, Tesla’s most significant selling point is all the gadgets and features that the car includes, such as its ability to self-drive and park, not to mention other exciting features.
The only issue is that getting a Tesla that has it all can cost a fair amount, but that should be alright as it can become a taxable asset when used as a company car.
Driving a Tesla can give you a taste of the future, as it feels like a new iteration of the car, and that can get a lot of staff very excited. The only issue with the Tesla is that it may not be the most practical and may not be a car that suits everyone.
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The Skoda Superb is yet another hybrid car that could be a great company car for tax purposes. The saloon car blends the practicality of typical Skodas with style and performance, creating a complete package you will enjoy driving.
The Skoda has some of the best boot and cabin size dimensions for these cars, making them super practical and roomy. The car also has a great suspension that gives it a comfortable ride that’s perfect for mid-range and shorter commutes to work.
The Superb iV could be more exciting to drive, with loose handling that can make it a bit dull and unexciting.
If you’re looking to get a Skoda Superb iV as a company car, the plug-in hybrid is perhaps the best option, as this car has a BiK rating of 10%, which helps to keep the tax costs down to make it an economical car to use as a company vehicle.
The plug-in hybrid may not have the best miles per gallon compared to other Superbs, but it should still have enough to get you from A to B regularly.
If you need a company car for longer business trips, then you may be best served to get something with better mileage so that you’re not refuelling or recharging as often.
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The Kia e-Niro is a unique choice for a company car because instead of being a saloon or hatchback, it’s instead a much larger and more commanding SUV. This car has a presence on the road, with its increased size giving you a better driving position than most other cars.
The Kia e-Niro gives you all the practicality you would expect from an SUV, offering plenty of space for backseat passengers and excellent boot space. Even if you get an e-Niro with a bigger battery, you’ll still have impressive boot space that should be able to store all your work equipment.
This type of car best suits a working professional who can also benefit from using the car in their personal life too. The car is fully electric and has a great range of 282 miles, making it a good option for many long-distance trips.
The Kia cruises at a good pace, although it can feel like it lacks power because of its larger size. It controls well and feels nice at lower speeds, but it may struggle to keep up with other traffic on a faster road like a duel carriageway or motorway. That said, it’s a smooth and comfortable car that’s quiet to drive and relatively relaxing.
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If you want a company car that gives you that executive feel, there’s nothing better than the Mercedes A-Class. It’s a smart-looking car with a good deal of practicality and offers good driving performance, helping you cruise between client meetings at a good pace.
The car is a hybrid hatchback, meaning that it offers a low BiK rating so that taxes remain small, helping you to save money with it as a company car.
That said, it’s a premium vehicle and will cost a fair bit to initially get, and it’s only available with the top-of-the-range trims, meaning there isn’t much scope to get a budget option.
That said, the top-spec Mercedes A-Class does look nice and feels comfortable to be in. It also has a great deal of performance, with excellent top speed and acceleration for a hybrid car, which is traditionally seen as less powerful.
It also handles well and has the quality suspension you should expect from a luxury brand like Mercedes.
While a regular A-Class will have a BiK rating of around 34%, the A250 e version will have one closer to 6%, helping to save owners of this car money when it’s being used as a company car.
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Toyota is an excellent brand if you’re looking for a good company car, with its Corolla model being one of the best available options. This car looks fantastic and has an elegant look while maintaining good functionality and practicality.
Toyota has been a big player in the hybrid and electric car market, meaning they can offer quality vehicles on the cutting edge. They have an incredible fuel economy and a good amount of power and performance to promise a fun yet relaxing drive.
Their hybrid engine is very quiet, and the car does a great job blocking road noise, making it super comfortable to cruise around in.
The main issue with the Toyota Corella is that it is not a plug-in hybrid, meaning that its emissions are much higher than most of the other options on this list. That means you may have to pay more tax when you have it as a company car.
That said, it’s still much cheaper to have as a company car than other hatchbacks, so it still remains an excellent option to consider if you’re a working professional looking for a company car.
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The Vauxhall Corsa has always been an excellent option for motorists looking for a fun yet practical hatchback. Now, its fully electric model can also become a viable option for professionals who need a company car.
The car looks smart and well suited to a working environment, while its engines also have pep and energy to help make your commute more exciting and fun. The car has a good amount of power, helping it achieve top speeds at a quicker rate, ensuring that you keep up with traffic and continue to progress on faster roads.
Its handling is a bit on the shallow side and isn’t as responsive and agile as other hatchbacks. Instead, it focuses on being a smooth drive, making it a more practical option.
There’s plenty of space in the Corsa, both for the driver and for any passengers, and it has a well-sized cabin that makes it well-suited to longer journeys and business trips.
With a low BiK rating of 28%, which can be much lower if you get the fully electric Corsa, it’s a great cheap option that shouldn’t cost more than £4 a month for the regular taxpayer.
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If you’re not keen on a saloon or estate car and instead want something a bit small and nimble for greater manoeuvrability, then one of the best cars you can get as a company car is the Citroen C3 PureTech.
This car has super low running costs, making it cheap to run, yet it also comes with a well-built engine that gives the car a lot of thrust and power. It excels at low revs and speeds, making it a fun car to drive around town, which can suit employees to have multiple client meetings in a local area.
The car does falter with the quality of its gearbox, with gear changes feeling a bit unpleasant, but that is only one minor flaw. When you get a C3 PureTech, you can expect lane assist, a built-in satnav and cruise control. Plus, it also has many great safety features, helping to make it a fun yet practical car to drive and use.
The C3 has striking looks, which can be great if you want a company car that turns heads. It’s not just style over substance, though, as this car also has a big boot and great space to hold passengers. The interior is well-designed, and the vehicle also lets in a lot of light for larger window panels, increasing its visibility.
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The Renault Clio is perhaps the perfect supermini on the market, as it’s a great hot hatchback with fantastic performance, comfortable interiors, and an efficient engine.
However, the TCe version can also be a tremendous company car option as well, especially for those who need it for inner-city journeys between clients.
The Clio TCe has an intelligent and modern-looking design, making it perfect for a working professional. It also has many features and technology that can make the car feel more expensive than it actually is. It’s also a very well-put-together car with a premium-looking interior and strong build quality.
The Clio is also a very comfortable and practical car with significant room for passengers, which is excellent if you need to ferry around colleagues.
This specific car has won many awards in both 2021 and 2022, so it’s a well-regarded car that should make a great company car.
Try to get a hybrid or electric model of this, though, as the standard petrol fuel type version can have a fairly high BiK rating of 28%, which may mean that you have to put a bit more of your salary to pay for this car than you would for others.
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A BiK rating is based on CO2 emissions and dictates the amount of tax that a company car owner needs to contribute towards tax. The lower the BiK rating, the less that needs to be paid.
In addition to things like the Co2 emissions, other factors such as the list price of the car, the VAT, and the P11D value also contribute to the final BiK rating.
When getting a company car, it’s good to aim for a car that has a BiK rating of around 10% if you’re getting a hybrid. For electric vehicles, most will have a BiK rating of below 1%, making them great value cars to have as a company car, and they likely are the type of cars that most people will go for.
A company car is a vehicle that an employee can use for work reasons. For example, a company car can be used instead of having to use their personal vehicle to travel to business meetings and see clients. This stops the employee from paying for their fuel, and the business owner also covers other expenses.
A company car can also be used for personal use. However, this will affect how you pay taxes and the amount you can write off as tax exemptions. It’s essential to be aware that driving to and from work from your home is considered personal usage in the eyes of HMRC, which can be frustrating.
If a company car is being used for personal and work reasons, it’s essential to use a timesheet to track when it’s used for what purposes so that you can pay the appropriate amount of tax.
The most tax-efficient company cars you can buy in the UK are: