Green company cars save you cash

  • New tax breaks in force
  • Greener cars encouraged
  • Could save employees £645m
Smaller cars that emit less than 120g/km of CO2 could save you cash - this Focus TDCi is an example
Smaller cars that emit less than 120g/km of CO2 could save you cash - this Focus TDCi is an example
New tax breaks come into force today that could save UK employees millions if their companies switch to greener cars.

A new study by the Energy Saving Trust shows that UK employees could save £645m through reduced benefit-in-kind income tax contributions.

If employers switched to cars with carbon dioxide emissions of 120g/km or under, the trust says there could be:

• £250m saving for UK employers through reduced National Insurance contributions;

• £780m saving for UK employers through reduced fuel consumption;

• A saving of £1.2bn on the fuel bills of employees who use their own car for work purposes;

• A reduction in carbon dioxide emissions from UK company cars of around 1.9 million tonnes a year;

• A reduction in emissions from company cars of around three million tonnes a year.

The trust has also discovered that only 7% of firms offer a financial reward to employees to choose a smaller, cheaper or lower-emitting car.

Additionally, more than half of companies that provide cars don't have a Corporate Social Responsibility (CSR) or environmental policy. Of those that do, only a third consider the environmental impact of the cars they provide.

More than half of all cars registered in the UK every year are company cars, so the trust is urging companies to switch to greener cars as soon as possible.

Nigel Underdown, head of transport advice at the trust, said: '120g/km really is the magic number as far as fleet managers are concerned: implementing a green fleet policy could save an organisation with 50 cars up to £45,000 every year.'

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