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Renault Business

Jargon Busting

P11D? BIK? Everything is explained here, so you can be confident in the choice you make.

Choosing the right business vehicle for you or your company is an important choice. We've summarised the key terms in one place, so you can make an informed choice for you and your business.

Of course, our team is always available to discuss everything you see here and more - simply call the Renault Business Hub on 0800 731 7066.

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P11D

 

The P11D value of your vehicle determines how much company car tax you pay.

 

It is calculated by adding the list price (including VAT), delivery charges and the full value of any factory-fitted options.

 

It does not include the initial Vehicle Excise Duty (Road tax) or first registration fee.

Benefit in Kind (BIK)

 

Benefit-in-kind is another contributor towards calculating the company car tax paid for a vehicle.

 

It is expressed as a percentage, and is attributed to a model based on its carbon dioxide emissions.

 

Therefore, the less emissions a vehicle emits, the lower its BIK rate will be.

 

How much tax do I pay?

 

The calculation is as follows:

 

P11D value x BIK rate x your income tax bracket = monthly tax liability.

 

Theoretical example: £17,000 x 21% x 20% = £59.50

 

Vehicle Excise Duty (VED)

 

Vehicle Excise Duty, commonly referred to as 'road tax' is a tax that must be paid on vehicles on the road, based on their emissions, and list price in some cases.

 

Since 1st April 2017, a first year fee is paid based on the CO2 emissions of the vehicle, followed by a flat rate which varies slightly depending on method of payment.

 

Find out more here

 

MPG (Miles per gallon)

 

The MPG rating of a vehicle is a standard measurement of fuel efficiency.

 

Figures are produced for comparison purposes and are measured according to the European Regulation 692/2008. Real world fuel (actual) consumption can vary as the fuel efficiency of a vehicle is influenced by driving behaviour, weather and road conditions. The use of technical equipment for example air conditioning, can also effect the fuel consumption. For further information, please visit the Vehicle Certification Agency website www.vca.gov.uk

 

Renault's engine technology means the range has a choice of engines offering high fuel efficiency, keeping your travel costs down.

 

Term

 

The term of a finance agreement is the agreed period over which you will pay for the vehicles, whether that be a rental fee or instalments towards owning the vehicle. This depends on the type of agreement you take out.

 

At the end of your term, depending on the finance method taken, you may have to make a choice of what to do next - in any case, our team will be more than happy to advise you at all times.

 

Balloon payment

 

A 'balloon payment' is a method deferring a portion of the owed amount in a finance agreement to the end of term in order to keep monthly repayments lower. This can significantly help improve cash flow.

 

Ownership

 

Depending on the finance method, your payments may be paying towards ownership. It might be the case that you are simply paying a rental cost with no intention to own the vehicle, but it may also be the case that you are paying towards outright ownership.

 

Our team will help you work out whether ownership is something you should bear in mind, and if so, explain which finance methods can facilitate this.

 

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