Best company cars to beat BIK in 2022/2023

Best company cars to beat BIK in 2022/2023

Posted by

Martin Brown

February 2022

Company cars continue to be an attractive benefit for employees, particularly with the cost savings offered by electric models.

Fleet Alliance’s order books finished 2021 at record levels for electric vehicles (EV), with plug-in models accounting for more than half of the year’s total models. It is a key indicator of the strength of the electrified company car market.

With a fully maintained car expensed by the company, with only low-cost benefit in kind (BIK) car taxation paid for by the employee, it’s easy to understand the enduring appeal of a company car, particularly a plug-in model.

The taxation system has been an important step in increasing numbers of electric vehicles on UK roads. In 2021, market share for pure-electric models doubled from the previous year to 12% of new cars sold, and the trend is continuing to rise. Expectations are that it will double again next time around.

Add in plug-in hybrid vehicles and it won’t be long before one in every three new cars registered will be able to be charged from a plug. And it’s company car drivers that are helping push this change forward.

But is a cash option a better alternative?

We’re not convinced here at Fleet Alliance, especially since the company car tax system has been designed in recent years to encourage take-up of ultra low emission vehicles. We’ve looked at this issue in a previous blog and found that 45% of cash takers pay more for their car than their cash allowance (see Cash takers – why is it costing you money?).

We would suggest a more appropriate method of funding is to opt for a salary sacrifice car to take advantage of the current low company car tax associated with plug-in cars.

Changes brought in for the start of the 2020/21 financial year saw benefit-in-kind taxation on pure-electric models set at 0%, and last year it was only 1%. For 2022/23 BIK doubles to 2%, and remains there until April 2025 for models with zero carbon tailpipe emissions, allowing company car drivers to save thousands each year in costs.

For ultra-low emission vehicles – plug-in hybrid electric vehicles (PHEVs) – also have attractive BIK although not to the same level as pure electric cars. Nevertheless, with company car tax rates of between 2% and 14% depending on CO2 emissions (below 50g/km) and the car’s electric-only range, PHEVs are a competitive tax proposition for drivers who feel full-electric remains a step too far at the present.

To help you find out which models are worth looking at, we’ve put together a list of great company car suggestions that you can drive, enjoy, and benefit from low levels of company car taxation, while delivering all the benefits of a company-provided vehicle.

We’ve split them into electric cars (EVs) and plug-in hybrid electric vehicles (PHEVs) since we recognise that not everyone is fully prepared, or able, to go fully electric. At least just now. So here’s our list – six EVs and six PHEVs.

Best EV Company Cars

Peugeot e-208 Active Premium

Peugeot’s 208 range combines style and substance, with the supermini available as an all-electric option – and it’s all the better for it. More responsive to drive than the petrol-powered equivalents, it shares a platform and powertrain with plenty of group stable-mates from the likes of Vauxhall, DS Automobiles, and Citroen. Well equipped and with a stylish cabin, the compact Peugeot doesn’t “look electric”, but it does stand out from the crowd all the same.

  • CO2: 0g/km
  • BIK tax band 22/23: 2%
  • Tax per month: from £9.92
  • EV Range: 217 miles

Ford Mustang Mach-E Extended Range RWD

A brilliant blend of practicality and sportiness, the Ford Mustang Mach-E also offers customers a wide variety of models – typical Ford really. Pick from shorter-range but more affordable versions to full-bore GT models; all get a balanced driving style and efficient electric motor. Putting the famous Mustang name on an electric car was a brave move; Ford made sure the Mach-E lives up to the reputation.

  • CO2: 0g/km
  • BIK tax band 22/23: 2%
  • Tax per month: from £15.83
  • EV Range: 379 miles

Kia EV6 Air RWD

Launching Kia’s next-generation of electric vehicles, the EV6 is a pure-electric crossover that has a long driving range and ultra-rapid recharging. It’s a viable long-distance EV, and it is all down to the advanced platform and systems Kia has developed alongside sister brand Hyundai. Expect more award-winning models to come along from the Korean brand in due course, but until then the EV6 will suit a great number of drivers.

  • CO2: 0g/km
  • BIK tax band 22/23: 2%
  • Tax per month: from £13.66
  • EV Range: 328 miles

BMW i4 eDrive40 Sport

If only there were an all-electric version of the BMW 3 Series, eh? Well now there is, effectively. The BMW i4 packs in a huge range into its executive offering, capable of covering almost 400 miles on a charge in its longest-range form. Add in the driving dynamics that live up to BMW expectations, and a familiar if tweaked executive saloon style, and it’s clear that BMW’s “new 3 Series” is in fact the i4.

  • CO2: 0g/km
  • BIK tax band 22/23: 2%
  • Tax per month: from £17.25
  • EV Range: 366 miles

Polestar 2 Long Range Single Motor

Tesla might be the most famous name in the electric vehicle market, but it doesn’t mean drivers should head straight to the Texas-based company when looking at an EV. One alternative is Polestar’s 2, a crossover fastback that rivals both the Tesla Model 3 and taller Model Y. A choice of different models means customers can tailor their set-up depending on needs, but all cover a lengthy distance on a charge, and come with a beautifully Swedish-inspired cabin.

  • CO2: 0g/km
  • BIK tax band 20/21: 2%
  • Tax per month: from £14.25
  • EV Range: 336 miles

Volkswagen ID.3 Tour Pro S

The answer for those that want a Volkswagen Golf, but an electric one, is the ID.3. The all-electric hatchback is available in a variety of power and driving range options, offering company car drivers to pick what they need. Whichever one you choose, all cost little to run, and offer a huge amount of space inside – VW reckons it’s a Golf-footprint but with the interior space of a larger Passat. A range of more than 300 miles is possible, and ultra-rapid charging can top much of that back up again in about half an hour.

  • CO2: 0g/km
  • BIK tax band 22/23: 2%
  • Tax per month: from £13.50
  • EV Range: 336 miles


Best PHEV company cars


Mercedes-Benz C300e AMG Line

One of the top executive saloons on the market also has a first class PHEV in its line-up. The C 300 e has a huge electric-only range for a plug-in hybrid, reducing BIK costs and increasing efficiency. Focusing on comfort and equipment, the latest C-Class range feels like it belongs in the tier above such is its overall feeling of quality and refinement. Good performance figures belie its handling set-up, which is tailored to comfort rather than dynamic driving. The engine is quiet when running, and the automatic transmission is exactly what you would expect from a Mercedes – excellent.

  • CO2: 13g/km
  • BIK tax band 22/23: 8%
  • Tax per month: from £59.75
  • EV range: 62 miles
  • Fuel consumption: 471mpg

Volvo XC40 T4 Recharge PHEV R-Design

Stylish, compact, practical… and electrified. In fact, the XC40 Recharge is also offered in pure-electric form, but if a full EV isn’t for you, the PHEV version certainly should be. It’s available with a choice of two PHEV systems, catering to various budgets, and it is the T4 rather than the T5 that will make most sense to company car drivers. A little cheaper with less performance, the XC40 T4 is only a second or so slower to 62mph than the more powerful T5, and has the better economy scores – and therefore lower BIK costs.

  • CO2: 48g/km
  • BIK tax band 22/23: 14%
  • Tax per month: from £93.16
  • EV range: 28 miles
  • Fuel consumption: 135mpg

Skoda Octavia iV 1.4 TSI SE L DSG Estate

Skoda’s Octavia has long been a brilliant company car – reliable, well built, and good value for money. Effectively a Volkswagen Golf but with more space, the latest generation of Octavia gets the iV PHEV treatment, making it even more well-suited to company car drivers. A 2.0 litre engine and electric motor combine to provide good levels of performance and refinement, while the electric-only range of 34 miles ensures low BIK costs and the ability to complete a number of trips on a single charge.

  • CO2: 21g/km
  • BIK tax band 22/23: 8%
  • Tax per month: from £44.91
  • EV range: 43 miles
  • Fuel consumption: 283mpg

Cupra Formentor e-Hybrid VZ1 245 DSG

Looking for something sensible but sporty, stylish but sound? The Cupra Formentor is a great left-field pick. The young brand has all the benefits of being unfamiliar to most, yet is built on SEAT – and therefore VW Group – underpinnings, so it’s a known quantity. As Cupra is SEAT’s sporty off-shoot, the Formentor crossover has a performance focus, and a sprint time of 7.0 seconds 0-62mph. Yet it also covers 34 miles on a charge, from a 1.4 litre petrol engine and electric motor combining to produce up to 245hp – or 204hp should you want a more affordable, less sporty model.

  • CO2: 33g/km
  • BIK tax band 22/23: 12%
  • Tax per month: from £77.75
  • EV range: 38 miles
  • Fuel consumption: 188mpg

BMW X5 xDrive 45e xLine

BMW’s spacious SUV has long been a favourite of those wanting a large but good-to-drive car, and now in its second generation as a PHEV, the X5 xDrive45e has a long electric-only range. With up to 54 miles available on a charge, the X5’s battery is 24 kWh – the same capacity as the original, all-electric Nissan Leaf. With that significant zero tailpipe emission range comes low CO2 ratings, keeping BIK costs about as low as possible for a PHEV. Throw in the sort of driving experience you would expect from a sporty SUV, and familiar BMW quality throughout, and the X5 is a brilliant all-rounder.

  • CO2: 27g/km
  • BIK tax band 22/23: 8%
  • Tax per month: from £90.33
  • EV range: 55 miles
  • Fuel consumption: 235mpg

Lexus NX 450h+ 2.5 Premium Pack

The first Lexus plug-in hybrid is a triumph for the company, building on excellent hybrid foundations but with added range and the ability to charge using a plug. As such, official fuel economy jumps from the 45mpg available from a hybrid NX to more than 300mpg for a PHEV version. It’s down to an electric range of 45 miles on a charge. Combine the electric components with a 2.5 litre petrol engine, however, and the compact SUV will still accelerate quickly, with a 0-62mph time closer to six seconds than seven.

  • CO2: 21g/km
  • BIK tax band 22/23: 8%
  • Tax per month: from £65.83
  • EV range: 40 miles
  • Fuel consumption: 314mpg

Getting the best out of a PHEV as a company car

To make the most of a PHEV as a company car, charging is important. Allowing it to function in electric mode as often as possible means the car can operate more as an EV than a petrol or diesel model, significantly reducing bills and emissions. Most PHEVs can cover your daily commute – or with a top up at work, will manage the return journey in zero emissions. So your commute should cost nothing in fuel and only pennies in electricity.

It’s estimated that to be really effective for both drivers and companies, PHEVs should be driven in zero-emission mode for at least 65% of the time.

If you have any concerns or questions, please call us. Fleet Alliance is a Go Ultra Low Company, so we have real experience of electric cars and PHEVs and can provide solutions to most issues you might face.

Fleet Alliance is also a member of EV100, a global collection of forward looking companies that are committed to accelerating the transition to electric vehicles. We can help you transition your fleet to electric where it’s appropriate using our own experience with the Fleet Alliance fleet.

If you’re looking for the best company car deals then check out our latest special offers or call us on 0345 601 8407 and we’ll be happy to assist.

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