Episode overview
Ed Passmore returns to the podcast to talk about Company Car tax planning. Covering electric and hybrid cars, new rules for vans and pickup trucks, upcoming changes to benefit in kind rates and how best to plan a new vehicles lease.
Do not commit to a new vehicle until you have listened to Ed’s expert views on this very important topic for business owners.
Episode summary
In this episode of Summing Up, host James is joined by Ed Passmore to explore one of the most common questions business owners face: should your next vehicle be purchased through your business or personally? The discussion breaks down the tax implications of company car ownership, including capital allowances, running costs, vehicle disposal considerations and the impact of government incentives designed to encourage businesses to adopt lower-emission vehicles.
A significant focus is placed on company car tax planning, with Ed explaining how Benefit in Kind (BIK) charges are calculated and why vehicle emissions play such an important role in determining the overall tax cost. The episode examines the advantages and disadvantages of electric, hybrid and conventional vehicles, while also highlighting upcoming changes to BIK rates and the importance of factoring future tax increases into long-term vehicle decisions. Listeners will gain practical insight into lease arrangements, salary sacrifice schemes and tax relief available for electric vehicle charging.
The conversation also covers recent and forthcoming changes affecting vans and pickup trucks, as well as VAT recovery opportunities and the different rules that apply to limited companies, sole traders and partnerships. Throughout the episode, Ed emphasises that there is no one-size-fits-all solution, and that careful planning is essential before committing to a new vehicle purchase. The podcast provides valuable guidance for business owners seeking to make a tax-efficient vehicle decision while avoiding costly mistakes.
Key takeaways
Buying a vehicle through a business is not always the most tax-efficient option.
Company car tax is heavily influenced by a vehicle's emissions rating.
Electric vehicles currently benefit from favourable Benefit in Kind tax treatment.
Hybrid vehicle tax advantages vary depending on emissions and electric range.
Capital allowances can significantly impact the overall cost of vehicle ownership.
Future increases to company car tax rates should be considered before entering long-term leases.
Salary sacrifice arrangements can offer tax-efficient ways to provide employee vehicles.
Recent rule changes affect the taxation of vans and pickup trucks.
VAT recovery opportunities depend on how the vehicle is used and structured.
Sole traders, partnerships and limited companies are subject to different tax rules when acquiring vehicles.
Chapters
00:00 - Introduction & Company Vehicles Overview
02:35 - Business Perspective: Corporation Tax & Capital Allowances
07:33 - Employee Perspective: Benefit-in-Kind (BIK) & List Price
09:40 - Emissions Bands: Electric, Hybrid & Petrol/Diesel Rates
13:16 - Future BIK Rate Changes (2028–2030)
17:34 - EV Charging Points & Fuel Benefit Rules
19:58 - Company Car vs. Personal Ownership
21:35 - Salary Sacrifice Schemes
23:40 - Vans, Commercial Vehicles & Double-Cab Pickups Rule Change
30:05 - VAT Treatment: Buying vs. Leasing
31:10 - Sole Traders & Partnerships: Private Use Adjustments
34:10 - Class 1A National Insurance & P11D Reporting
35:40 - Upcoming Jaguar Land Rover Event & Wrap-up
Guest bio
Ed Passmore is a Partner at Lovewell Blake, specialising in tax advice for businesses and private clients. A Chartered Tax Adviser and Chartered Accountant, he has particular expertise in inheritance tax planning, capital gains tax, business taxation and succession planning, and regularly shares his insights through the firm's Summing Up podcast.
