Following their review of vehicle taxes and the Worldwide Harmonised Light Vehicle Test Procedure (WLTP – measuring fuel consumption and CO2/pollutant emissions from passenger cars), the Government has announced their comprehensive three-year plan for vehicle car benefits.
Where your company car is registered on or after 6 April 2020, you will generally get a 2% decrease on your company car tax for the 2020/21 tax year compared to vehicles registered prior to 6 April 2020. This is good news for those renewing their cars after April 5th, but not before…
We’ve covered more about this in our other blog here, but it’s worth noting that for pure electric cars with zero emissions, you won’t have to pay any Benefit in Kind (BIK) tax at all for 2020/21, no matter when your car was registered. This is an added bonus for anyone who was already looking forward to the previously published 2% rate for 2020/21.
This 0% rate will also be applied to company cars registered from 6 April 2020 with emissions between 1 and 50g/km and with an electric mile range of over 130 miles, giving more hope for newer hybrid vehicles and the way they can assist in the move to low or zero emission fleets. Sadly, there’s no such luck for diesel company car drivers who will have the altered rates plus a 4% surcharge which will nudge their tax rate up towards a maximum of 37%.
You can see the benefit tax rates for vehicles registered both before and from 6 April 2020 here.
By having two tables (before and after 6 April 2020) it could mean fun and games for P11D calculations until the end of the three-year period (where it will go back to one table) so speak to us sooner rather than later on how to deal with this.