Fleet News

120 is the magic number to lower tax liability

This year, 120 is the magic number.

It’s the level of emissions that unlocks the door to savings right across the board, from company car tax for drivers to National Insurance Contributions for employers.

It might even get you out of the London congestion charge, if Mayor Ken Livingstone makes up his mind about the rules.

From April this year, any driver who chooses a company car which has CO2 emissions rated at 120g/km or less will qualify for the new benefit-in-kind (BIK) tax rate of 10%.

It is an incentive to find a car under that threshold, as from 121g/km a petrol car will fall into the 15% tax bracket, which is quite a leap.

It means drivers need to be aware of their choices, as they could quite easily be costing themselves money just by opting for a slightly higher emitting car.

How much?

Take two petrol cars with a P11d value of £15,000, one at 119g/km and one at 121g/km.

The 119g/km car would cost a 22% taxpayer £330 a year thanks to its 10% BIK banding, while the 121g/km, at the usual 15%, would cost £495.

Just for 2g/km of CO2.

However, the majority of cars that will qualify for the lower band are diesel vehicles, by the very nature of diesel engines emitting less CO2.

But as with the rest of the BIK tax scale, a diesel car incurs a 3% surcharge due to its higher emissions in areas such as NOx and particulates, so in fact all sub-121g/km diesels will be charged at 13%.

On the petrol side, almost all the cars that qualify are small city cars or hybrids which, as long as they also emit 120g/km or less, will also be taxed at 10%.

The confusing discounts that previously existed for hybrid vehicles have been
discontinued.

But what all of this means is that, at the moment, there are not that many cars that qualify for the lower rate of tax that are fit for purpose for company car drivers needing a vehicle for high mileage business work.

But there are still some very good vehicles available, and we’ve listed below what is on offer at the moment from all the manufacturers.

Employers can save too

 

Just as drivers take notice of their benefit-in-kind tax relative to the CO2 emissions of their cars, then so should employers, because companies pay Class 1A National Insurance relative to the CO2 emissions of the cars on the fleet.

It works on the same scale as emissions, ranging from 10% for
sub-120g/km cars (with a 3% surcharge for diesel) up to 35% for the highest emitting vehicles.

So a car with P11d of £20,000 and CO2 emissions of 119g/km, putting it in the 13% tax band, would be taxable at £2,600.

This figure is then subject to tax of 12.8%, for all vehicles, so the annual Class 1A NIC contribution would be £333.

For a diesel car with emissions of 121g/km, placing it in the 18% tax band the NIC bill would be £461, a difference of £128.

Not much for a firm, but extrapolate across a 100-strong fleet where lowering emissions are not promoted and the increased bill could run into thousands of pounds.

120 or bust – the cars that qualify

AUDI

Audi has remapped the engine management – or detuned in layman’s terms – its 1.9 TDI diesel engine to 105bhp and revised its gear ratios to offer A3 and A3 Sportbacks that come in under the 120g/km threshold.
A3/Sportback 1.9e TDI 105: 119g/km

BMW

BMW is the current leader in minimising emissions without making compromises in other areas, and all 118d models are rated at 119g/km.

Thanks to its Efficient-Dynamics technology, which includes
engine stop-start, brakeforce regeneration and gearshift indicator, it still produces 143bhp, making it a strong contender for company car drivers looking for low tax and performance.

118d: 119g/km

CITROËN

A number of Citroën’s small, light cars are low on CO2, including a C4 with the EGS semi-automated six-speed gearbox.

It’s a rather jerky system, but it does save between 3-5% over conventional manuals, sneaking the C4 down to 120g/km.

C1 1.4 HDi/1.0: 109g/km
C2 1.4 HDi: 112g/km
C3 1.4 HDi: 115g/km
C3 1.6 HDi 16v 92bhp: 118g/km
C2 1.6 HDi 16v: 119g/km
C4 1.6 HDi 16v EGS: 120g/km

DAIHATSU

Daihatsu’s two little cars use their small size and tiny petrol engines to good effect, although their fleet uses are limited.
Charade L25 1.0L EFi: 114g/km
Sirion M300 1.0 EFi: 118g/km

FIAT

One of the most exciting new cars this year, the Fiat 500, has petrol and diesel engines that hit the mark.
Perhaps not a high-mileage model, but plenty of user-choosers might go weak at the knees at the thought of low tax and high style.
500 1.3 MultiJet: 111g/km
Grande Punto 1.3 MultiJet 75 bhp: 119g/km
Grande Punto 1.3 MultiJet: 90 bhp Dualogic: 119g/km
Grande Punto 1.3 MultiJet: 90 bhp Dualogic with optional DPF: 119g/km
500 1.2: 119g/km

FORD

Using remapped engine management, lowering the ride height, fitting new aerodynamic bumpers, pouring in low-viscosity transmission oil and shoeing the Focus with low rolling resistance tyres has produced the Focus ECOnetic.

The new Focus is as superb as ever.
Focus 1.6 Duratorq (90) TDCi ECOnetic hatch/estate/saloon: 115g/km
Fiesta 1.6 Duratorq TDCi (90PS): 115g/km
Focus 1.6 Duratorq TDCi: 118g/km
Fusion 1.4/1.6 Duratorq TCi : 119g/km

HONDA

Honda’s Civic IMA hybrid is perhaps one of the best low tax offerings, with plenty of space, reliability, a very low tax bill and is a good long distance proposition.

As one of only two lower-medium cars at 10%, it is superb value and well worth considering.

Civic IMA 1.4 ES: 109g/km

HYUNDAI

A diesel Getz is unlikely to set fleets’ hearts a flutter, but it is a good supermini.
Getz 1.5 CRTD CDX+/GS: 118g/km

MINI

For user-choosers, the diesel MINI has finally come of age.
A much better engine than in the first “new” MINI, it also uses parent company BMW’s EfficientDynamics to achieve low CO2 without hindering performance, which stands at a useful 110bhp in a car this size.
Cooper D: 104g/km
Cooper Clubman D: 109g/km

MITSUBISHI

Mitsubishi’s clever little city car looks odd, and is really only suited for its intended purpose: zipping round the city.
i 0.7 MIVEC: 114g/km

PEUGEOT

Peugeot’s new 308 is a key fleet car in the sub-120g/km bracket, thanks to a 90bhp 1.6-litre HDi diesel engine running on bespoke fuel-saving Michelin energy tyres.
107 1.0: 109g/km
206 1.4 HDi 70: 116g/km
207 1.4 HDi 70: 120g/km
308 1.6 HDi (90 bhp) : 120g/km

RENAULT

Renault’s efficient 1.5 dCi engine is used to good effect to give the French firm a number of low emission offerings with the noticeable key fleet model, the Megane, although with 86bhp it is on the sluggish side.

The Modus with Quickshift looks a good option though.
Clio Campus 1.5 dCi 65: 115g/km
Clio 1.5 dCi 86: 117g/km
Megane 1.5 dCi 86: 117g/km
Clio 1.5 dCi 86 Quickshift: 118g/km
Modus 1.5 dCi 86 Quickshift 5: 119g/km
Modus 1.5 dCi 86: 119g/km
Clio Campus Sport 1.5 dCi 68: 119g/km

SEAT

Using the Volkswagen Group small three-cylinder turbodiesel engine sees two Ibizas here, including the Ecomotive at 99g/km.
Ibiza 1.4 TDI PD Ecomotive: 99g/km
Ibiza 1.4 TDI PD (80 PS): 119g/km


SKODA

The new Fabia is an excellent small car, and the Estate could do a decent job for some drivers who need plenty of load space.

Fabia hatch/Estate 1.4 TDI PD 80: 120g/km

SMART

Although all Smart Fortwos come in below the 120g/km barrier, they are still relatively high emitting for their diminuitive size and weight.

The new model is much better to drive and feels more secure than before, so you shouldn’t be scared of a long journey in one.

But every day?

Fortwo 42: 112g/km
Fortwo coupe cabrio 50 175 tyres: 113g/km
Fortwo cabrio 175 rear tyres: 116g/km
Fortwo coupe 50 175 rear tyres: 116g/km
Fortwo coupe 61 175 rear tyres: 116g/km
Fortwo coupe 62 175/195 rear tyres: 116g/km
Fortwo coupe 61 195 rear tyres: 118g/km
Fortwo cabrio 61 195 rear tyres: 118g/km

TOYOTA

The Prius, as a hybrid, is rated at 10% for BIK tax and looks a very good low emission company car, if you can put up with the Buck Rogers looks and uninspiring drive.
Yaris diesel is an excellent small car.
Prius 1.5 VVT-i Hybrid: 104g/km
Aygo 1.0 VVT-i: 109g/km
Aygo 1.4 D-4D: 109g/km
Yaris 1.4 D-4D: 119g/km

VAUXHALL

Vauxhall is a little slow in the sub-120g/km race, and the lack of a low emission Astra is a noticeable omission from the sector.

Corsas are fighting a lone battle as a result.

Corsa 1.0i 12v ECO 3/5-door: 115g/km
Corsa 1.3CDTi 16v 3/5-door: 115g/km
Corsa 1.3CDTi (75PS): 119g/km

VOLKSWAGEN

Revised turbocharger, higher gear ratios and improved aerodynamics mean the three-cylinder Polo BlueMotion achieves some impressively low emissions.

New Golf BlueMotion at 119g/km is expected soon.

Polo BlueMotion 1.4 TDI 80PS: 99-104g/km
Polo 1.4 TDI (70 PS) S: 119g/km
Polo 1.4 TDI (80 PS) SE: 119g/km
 

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