Electric vs diesel - how much can you save with Benefit in Kind?

18 March 2021

So you’re considering a company car. Your employer operates a car salary sacrifice scheme and you know it could save you money. You know enough about Benefit in Kind to understand the basic tax implications (and if you don’t, we’ve written a comprehensive guide that will answer your questions).

But now you’re unsure about how to choose the best company car for Benefit in Kind. Is now the time to go electric, or is it better to stick with a traditional model?

With changes to Benefit in Kind car rates coming in April 2021, a good first step is to calculate your BIK percentage band by using this table or this company car Benefit in Kind calculator.

However, to help you see how Benefit in Kind tax works, we’ve developed this in depth comparison of the same car, both electric and diesel.

Let’s meet Sue. Earning £40,000 a year as a company administrator, Sue is 41 years old, lives in Watford with her husband and two teenage children. She wants a good reliable car for short journeys (taking the kids to after school clubs, weekly supermarket trips and family visits but never travelling far). The Kia Niro is an ideal choice for Sue but, on the basis of driving 5,000 miles a year, how much can she save by switching to electric?

Starting with the Kia Niro 1.6 diesel, Sue has a BIK tax rate of £108.12, compared with just £5.47 for the Kia Niro EV. The gross salary sacrifice is a touch higher for the EV (£392.98 compared to £381.50) but the net cost including BIK is where you see the true savings: £367.54 for the diesel Kia and £272.69 for the electric Kia.

The Kia Niro EV has a range of 250 miles on a full charge and won the What Car? Overall Car of the Year Award when it was launched, the first electric car ever to do so. Remember you’ll escape the congestion charge if you take it to London and benefit from various parking perks in other UK cities. It’s a groundbreaking EV that gives range, comfort and reliability.

Head to head against its traditional counterpart, Sue gains all the practicality she needs and makes substantial savings from the Benefit in Kind car rates.

Whether your circumstances are similar to Sue’s, or whether you are after a different type of company car altogether, it’s always worth comparing traditional to electric. The gap in performance between petrol or diesel and electric has narrowed significantly in recent years. This, together with improvements in range, increases in charging points nationwide, and greater choice in electric and hybrid cars, means there’s little compromise and a whole lot of money to save.

As lockdown eases and we begin to travel again, many people are asking us about more cost-effective company cars, how to maximise their Benefit in Kind tax savings and what the best electric car choices are. As industry experts, we are always happy to help people make the right decision for their situation.

Login or Create Your Account to find out which company car will work best for you and the Benefit in Kind tax savings you can make.

Call us: 0333 400 2020

If you would like help placing an order or you are an existing driver.

Forgotten Password

Your main account details are held by your benefits provider and as such we are unable to recover your login details. Please log in through your benefits provider site to access the Tusker online driver site.

Please enter your email address so we can email you a link to reset your password.

Your password reset request has been received. If we have an account associated with the email address provided, you will receive an email shortly.

Create Account Help

      Thanks, we’ll work on this now for you.
      In some instances, we may need to contact your employer but we’ll aim to be back in touch within 24 hours.

    In order for us to help get you set up please can you provide the following information:

    Unfortunately we are unable to find out what your work email address or employee/payroll number is.

    If you're not sure where to find this, please contact your Human Resources or Payroll team.


    Login

    Action required

    I've read and accepted the Privacy Policy.

    CONTACT PREFERENCES

    We’d like to provide you with updates on your scheme, offers and news but to do that, we need you to update how we can contact you.

    UPDATE NOW