Cars with the cheapest company car tax bills

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4 mins read

25 October 2022

The UK may be one of the world’s oldest company car markets, but drivers have perhaps never had it better than they do right now.

Aiming to phase out sales of new petrol and diesel cars by 2030, the government has heavily incentivised the alternatives with a set of ultra-low tax bands introduced last year.

With a typical 90% reduction in company car tax compared to a petrol or diesel car, it’s no great surprise that – according to the SMMT – two thirds of new electric vehicles were registered to fleets and business users last year.

Better still, the ever-expanding choice of models means you don’t have to compromise on your priorities to keep your tax bills low. Here’s how.

Autocar's company car tax calculator, showing exactly what you'll pay for each and every make and model

Cheapest Overall: Smart EQ Fortwo

Unless you’re committed enough to opt for a quadricycle (such as the Renault Twizy), Smart offers the lowest tax bills in the industry. A range of 80 miles and no rapid charging means the EQ Fortwo's use case is limited to cities, but even the EQ Forfour undercuts its closest rivals if your company’s choice list restricts you to five-door cars.

Monthly BIK (20%/40%): £7.39/£14.78

Also consider: MG4 EV SE Standard Range

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MG’s rival for the Volkswagen ID.3 offers impressive value for money. It’s two segments bigger than ForFour, offers almost three times more range (218 miles), five times faster charging and room for five.

Monthly Benefit-in-Kind (20%/40%): £8.65/£17.29

Cheapest motorway cruiser: MG4 EV SE Long Range

If long journeys are a priority, then the MG4 is hard to beat. With the larger of its two battery options, it boasts 280-mile range – and you’ll get more than 200 of those back in half an hour on the fastest chargepoints. Adaptive cruise control, Android and Apple smartphone connectivity and lively 201bhp performance mean it’s well suited to road trips.

Monthly BIk (20%/40%): £9.48/£18.96

Also consider: Hyundai Kona Electric Premium (64kWh)

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It’s smaller than the MG, but the Kona is one of the most efficient electric cars on the market and offers slightly more range (300 miles) as a result. The downside is slightly slower charging if you’re on a longer journey.

Monthly BIk (20%/40%): £11.90/£18.96

Cheapest tow car: Polestar 2 Standard Range Single Motor

Traditionally a weakness of electric cars, there’s a growing selection of vehicles which can tow a four-berth caravan. The Polestar 2 can pull up to 1,500kg and it’s available with a semi-electric towbar and roof rack that can carry an additional 75kg. Two-wheel drive versions can travel up to 297 miles, even with the smaller battery pack.

Monthly BIK (20%/40%): £14.37/28.74

Also consider: Hyundai Ioniq 5 Premium 217hp RWD 77kWh

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Hyundai’s retro-futuristic IONIQ 5 can tow slightly heavier 1,600kg trailers and it has an unusual trick up its sleeve. The optional vehicle-to-load system means you can boil your caravan’s kettle while you take a break.

Monthly BIk (20%/40%): £15.03/£30.06

Cheapest seven-seater: CitroÃ«n Ã«-Berlingo XL Feel

Despite being based on a van, the Ã«-Berlingo offers a surprisingly car-like driving experience and 174-mile range, 80% of which can be recovered within half an hour. It offers sliding doors and a flexible interior for families, and there are similarly priced Peugeot and Vauxhall alternatives if you don’t like the way it looks.

Monthly BIk (20%/40%): £10.83/£21.66

Also Consider: CitroÃ«n Ã«-SpaceTourer M Business Edition

If space is your number one priority, then the entry-level Ã«-SpaceTourer is a no-frills way to move nine adults around. However, there’s an enormous price gap if you want to upgrade to the more car-like versions.

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Monthly Benefit-in-Kind (20%/40%): £10.58/£21.16

Cheapest performance car: Polestar 2 Long Range Dual Motor Performance

The top-spec Polestar 2 offers the most horsepower-per-pound of company car tax. With a supercar-like 469bhp, it reaches 62mph in just 4.2 seconds and includes upgraded suspension, wheels and brakes compared to the standard Long Range Dual Motor version. The 301-mile range means you can take the scenic route home, too.

Monthly Benefit-in-Kind (20%/40%): £18.17/£36.33

Also consider: Tesla Model 3 Performance

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The 456bhp Model 3 flagship is one of the fastest accelerating production cars on the market, reaching 62mph in 3.1sec and with space for the family on board, too. It gets access to Tesla’s excellent Supercharger network but arguably doesn’t have the Polestar’s styling cachet.

Monthly BIK (20%/40%): £20.48/£40.96

Alex Grant