Finance Directors Uninformed Regarding Tax Savings From Green Cars


ALD Automotive, a fleet management firm, and YouGov recently learned that finance directors are not aware of the positive impact green vehicles can make on employee wallets. The two entities surveyed fleets containing over 500 vehicles and found that 35 percent of these professionals did not know greener cars could reduce employee National Insurance Contributions (NICs).

By adding greener cars to their fleets, they can assist employees where it really matters.

The NIC rate rose from 12.8 to 13.8 percent in April. Businesses can save by offering vehicles with lower CO2 emissions. When a company switches to greener models, its Class 1A NIC is reduced. Changing some models to diesel may save £355.

This is a potential savings of £167,500 for a 500-vehicle fleet.

Employees benefit from lower benefits in kind from the employer. Though these benefits are not paid as wages, they are taxable. The tax will be reduced when employees use a green company vehicle. Businesses should also alert staff to the savings available when eco-friendly cars are leased.


Knowing about the tax breaks and cost savings available to them helps employees better manage their finances.

According to the survey, just 15 percent of finance directors claimed to thoroughly understand costs relevant to running a company vehicle fleet. If they take the time to research the financial benefits of green cars, they can save their companies quite a bit of money.

During times like these when production costs are rising and financing is difficult to find, this can make much-needed cash available.

Even employees who take out car loans can benefit from owning a green automobile. Local governments have established goals regarding the number of eco-friendly cars on their roads. Some are offering financial incentives to get their residents into these automobiles.

The planet and driver wallets will be greener as a result.