The number of employees paying company car tax (Opens in new window) increased by 80,000 year-on-year, marking a 10.5% rise following last year’s 5.5% increase. The latest benefit-in-kind statistics reveal that 840,000 employees paid car tax in 2023/2024, compared to 760,000 in 2022/2023.
The shift towards electric company cars continued in 2023/2024, and the overall growth in company car numbers is partly driven by the rising popularity of salary sacrifice schemes. Last year’s FN50 survey showed that salary sacrifice reached its highest-ever market share, accounting for 6.2% of cars on the FN50 risk fleet.
However, the actual number of company car drivers may be higher due to ‘considerable underreporting’ since voluntary payrolling was introduced in April 2016.
New HMRC data also highlights a long-term downward trend in both the number of recipients and the total taxable value of car fuel benefits. Recipients decreased from 240,000 in 2011/2012 (with a taxable value of £770 million) to 40,000 in 2023/2024 (with a taxable value of £170 million). HMRC suggests this decline likely reflects rising fuel prices over the period, prompting employers and employees to reassess the value of fuel benefits relative to the tax charge.
Due to lower fuel costs around 2021-2022 during the pandemic, and increased electric vehicle adoption in 2023/2024, the total taxable value of car fuel benefits fell from £200 million in 2022/2023 to £170 million in 2023/2024.
The average taxable values for car benefit and car fuel benefit in 2023/2024 were £3,910 and £3,990, respectively, down from £4,750 and £4,260 the previous year.