The taxable benefits are very high for the private use of a company car; and the benefit charge keeps going up even though the car loses value.

For example

A car with a list price of £25,000 and CO2 emissions of 175g/km creates a taxable benefit of £5,750 (23% of £25,000) in 2013-14.  The charge rises to £6,000 (24% of £25,000) in 2014-15 and increases every year to £7,000 (28% of £25,000) in 2016-17.

You can check the figures for your car (or proposed car) on the HMRC website although at present the calculator stops at 2014-15.

Lease cars

For the past few years individuals have been able to take out a personal car lease agreement with the company paying all the lease costs.  The taxpayer has only been assessed on the payments made by the company.  This could well be less than the car benefit charge.

HMRC has blocked this loophole from 6 April 2014.  From that date, if a company pays for the cost of a personal car lease the employee will be treated as if the company had provided the car.

Electric cars

The current car benefit on electric cars is 0% however this is due to rise to 5% of list price, increasing to 7% in 2016-17 and 8% in 2017-18

This benefit is expected to carry on rising.

Fuel for electric cars is, of course, electricity so such cars are not subject to car fuel benefit.