Just when you think you know where you stand with HMRC, the taxation goalposts are moved. The latest thought-provoking rule change means that anyone being offered a company car has to reconsider their vehicle selection.

At the moment, diesel-engined company cars are subject to a 3% ‘benefit in kind’ surcharge over the petrol-powered counterparts. The effect has been that, as petrol engines have become increasingly fuel-efficient, some petrol-powered cars have been competitive with their diesel counterparts, in terms of the tax charge. They are also noticeably cheaper at the pumps when it comes to refuelling.

From April 2016, this will all change, as the BIK surcharge on diesel vehicles is dropped. This means that the tax burden with diesel cars becomes relatively lighter.

All nice and straightforward, then? Well, this is taxation, so there is nothing simple about it. Diesel-hybrid vehicles have never been subject to the surcharge, for a start. Then, any kind of hybrid tends to be at least 5% cheaper because of its lower emissions. The only ‘simpler’ aspect is that two current two BIK rates, one for diesel vehicles and another for petrol-powered, will be replaced by a single rate. You will still have to know, however, which one of ranked emissions brackets is appropriate for your vehicle – and there are 32 emissions brackets.

What can you do about it? One option is to re-evaluate not just your company car policy, but your fuel policy. If any of your drivers ever use a single vehicle for both business and private travel, there is a good chance that you could reduce both their income tax exposure and the organisation’s NIC liability. If you want to know more, just ask: helping to reduce overall lifetime costs is one of the key benefits of implementing MileageCount.