Company car numbers surge as EVs and Salary Sacrifice drive growth


The number of employees paying company car tax has risen to 840,000 in 2023/24 – an increase of 80,000 year-on-year, or 10.5%, according to new HMRC figures. This builds on a 5.5% increase the previous year and marks a clear reversal of earlier declines.

Despite the higher numbers, the total taxable value of company car benefit fell to £3.27 billion from £3.6bn in 2022/23. The trend reflects the continuing shift to electric vehicles (EVs), which attract lower benefit-in-kind (BIK) rates, and a modest rise in non-EV list prices.

HMRC

From 2011/12 to 2019/20, the value of reported company car benefit had grown significantly, driven by increases in BIK rates and list prices, before declining due to EV uptake and tax incentives.

The rise in 2023/24 company car numbers is partly attributed to the growing popularity of salary sacrifice schemes. Last year’s Fleet News' FN50 survey showed such schemes now account for 6.2% of the risk fleet.

HMRC also highlights ongoing underreporting, especially since voluntary payrolling was introduced in 2016. Meanwhile, the number of employees taxed on car fuel has dropped from 240,000 to 40,000 over the last decade.

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