April 2020 Company Car Tax: Everything you need to know, including 0% BiK on electric vehicles

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New Benefit-in-kind (BiK) tax rates are now in force including a zero rate for pure electric vehicles, such as the Nissan Leaf, Kia e-Niro or Tesla Model 3, to accelerate the shift to zero emission cars.

All zero emission models will pay no company car tax in 2020-21, 1% in 2021-22 before returning to the planned 2% rate in 2022-23.

Company car drivers with vehicles registered before 6 April 2020 will also see their company car tax bands frozen at the 2020/21 rates until 2022/23.

Those registering new cars after 6 April 2020 will also be rewarded with a two-percentage-point tax cut in a move that will benefit just under a million company car drivers.

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The decision was made following a review of WLTP and vehicle taxes. With BiK rates currently calculated on CO2 outputs, the switch to WLTP emissions testing instead of the previous NEDC resulted in higher emissions being recorded, and as such company car users faced a potentially significant hike in rates.

As a result, an extensive consultation between the government and the automotive industry took place with the Treasury agreeing to replace previously published BiK rates for the 2020/21 financial year with new tables.

Vehicle CO2 Emissions BIK rate
2019-20 2020-21 2021-22 2022-23
0g/km 16% 0% 1% 2%
1-50g/km (electric range >130 miles 16% 2% 2% 2%
1-50g/km (electric range 70-129 miles 16% 5% 5% 5%
1-50g/km (electric range 40-69 miles 16% 8% 8% 8%
1-50g/km (electric range 30-39 miles 16% 12% 12% 12%
1-50g/km (electric range <30 miles 16% 14% 14% 14%
51-54g/km 19% 15% 15% 15%
55-59g/km 19% 16% 16% 16%
60-64g/km 19% 17% 17% 17%
65-69g/km 19% 18% 18% 18%
70-74g/km 19% 19% 19% 19%
75g/km 19% 20% 20% 20%
76-79g/km 22% 20% 20% 20%
80-84g/km 22% 21% 21% 21%
85-89g/km 22% 22% 22% 22%
90-94g/km 22% 23% 23% 23%
95-99g/km 23% 24% 24% 24%
100-104g/km 24% 25% 25% 25%
105-109g/km 25% 26% 26% 26%
110-114g/km 26% 27% 27% 27%
115-119g/km 27% 28% 28% 28%
120-124g/km 28% 29% 29% 29%
125-129g/km 29% 30% 30% 30%
130-134g/km 30% 31% 31% 31%
135-139g/km 31% 32% 32% 32%
140-144g/km 32% 33% 33% 33%
145-149g/km 33% 34% 34% 34%
150-154g/km 34% 35% 35% 35%
155-159g/km 35% 36% 36% 36%
160-164g/km 36% 37% 37% 37%
>165g/km 37% 37% 37% 37%

Jay Parmar, director of policy and membership at the British Vehicle Rental & Leasing Association (BVRLA), said: “Our regular engagement with policymakers is clearly paying off as there now appears to be a greater appreciation for the importance of our industry in delivering government’s wider economic and environmental ambitions.”

“Recognising the value of the company car market in supporting the transition to zero emission technology is also a positive endorsement for our sector, showing refreshing alignment between government’s environmental and fiscal policies.

“The Treasury is giving back some of the unfair company car tax windfall it was set to receive as a result of WLTP and providing some essential extra visibility on future tax costs for those looking to order their next vehicle. This is a good day for company car drivers and our members.”

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