Company car leases can be tax-efficient when the car is primarily used for business and the company is VAT-registered: employers face higher National Insurance and may reclaim parts of lease costs/VAT, while employees pay BiK based on the car’s P11D value, CO2 band, fuel type, and their income tax rate. From 2025, EVs will pay VED (still lower than ICE), first-year VED rises for high emitters, and EV BiK rates increase gradually—affecting lease choices for EVs, PHEVs, and high-CO2 cars. You can estimate BiK via P11D × BIK% × personal tax rate, but actual bills vary with allowances, salary sacrifice, and contributions.
