Company Car Tax Update: July 2019

  • electric vehicle company car tax

No Company Car Tax for Electric Vehicles for 2020/21

The Government has today announced that, from April 2020, company cars producing no CO2 emissions will attract a zero percent Benefit-in-Kind (BiK) tax rate, replacing the previously published rates of 2%.

The zero percent rate will also apply to vehicles, first registered from 6 April 2020 and producing between one and 50g/km of carbon dioxide, that are capable of more than 130 miles on battery power alone.

These rates will then increase to 1% for 2021/22 and 2% for 2022/23 for vehicles registered after 6th April 2020.

The Government has also provided clarity on the BiK rates for all company cars up to and including the 2022/23 tax year, providing much needed certainty to both drivers and fleet decision-makers.

Two Tax Tables

Up until the 2022/23 tax year, two tables of company car tax rates will be in operation; one for vehicles registered before 6th April 2020 and one for vehicles registered after that date. The full tables can be found below:

Cars First Registered before 6th April 2020

Cars First Registered from 6th April 2020

Diesel cars will continue to be subject to the 4% premium on the above rates, but those meeting the latest RDE2 rules on nitrogen oxide emissions will be exempt from this.

The Government also used the announcement to reveal that vehicle excise duty (VED) rates will remain unchanged from April 2020, despite ‘true’ WLTP values superseding NEDC correlated values for BiK tax calculations. A period of consultation on the future of VED is expected later this year.

Further to these changes, the announcement also gave a nod to the fleet industry’s call for ongoing clarity of movements in taxation, stating that it “… aims to announce appropriate percentages at least two years ahead of implementation to provide certainty for employers, employees and fleet operators.”

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