No Company Car Tax on Zero Emission Vehicles in 2020/21

Company Car Tax on Low Emission Vehicles

Company car tax rates increased in April 2019, as standard.  However, the rates are set to fall from 6 April 2020 for cars with CO2 emissions of up to 69g/km.

The Government has announced that in the 2020/21 tax year there will be no benefit in kind on company cars with zero emissions.

Further, no benefit in kind will apply in 2020/21 for cars first registered from 6 April 2020, with emissions up to 50g/km and an electric range of 130 miles or more.

A benefit in kind will apply from 2021/22, but the low rates do present a planning opportunity for business owners.

The tables below show the company car rates the Treasury has announced for years 2020/21 to 2022/23 for vehicles first registered before 6 April 2020, and those first registered from 6 April 2020.

Cars first registered before 6 April 2020 Cars first registered from 6 April 2020
CO2 Emissions (g/km) Electric range (miles) Appropriate percentage (%) Appropriate percentage (%)
20/21 21/22 22/23 20/21 21/22 22/23
0 n/a 0 1 2 0 1 2
1-50 >130 2 2 2 0 1 2
1-50 70-129 5 5 5 3 4 5
1-50 40-69 8 8 8 6 7 8
1-50 30-39 12 12 12 10 11 12
1-50 <30 14 14 14 12 13 14
51-54 15 15 15 13 14 15
55-59 16 16 16 14 15 16
60-64 17 17 17 15 16 17
65-69 18 18 18 16 17 18
70-74 19 19 19 17 18 19
75-79 20 20 20 18 19 20
80-84 21 21 21 19 20 21
85-89 22 22 22 20 21 22
90-94 23 23 23 21 22 23
95-99 24 24 24 22 23 24
100-104 25 25 25 23 24 25
105-109 26 26 26 24 25 26
110-114 27 27 27 25 26 27
115-119 28 28 28 26 27 28
120-124 29 29 29 27 28 29
125-129 30 30 30 28 29 30
130-134 31 31 31 29 30 31
135-139 32 32 32 30 31 32
140-144 33 33 33 31 32 33
145-149 34 34 34 32 33 34
150-154 35 35 35 33 34 35
155-159 36 36 36 34 35 36
160-164 37 37 37 35 36 37
165-169 37 37 37 36 37 37
170+ 37 37 37 37 37 37

For certain diesel vehicles a further 4% must be added to the appropriate percentages to arrive at the employment benefit value.

It’s expected that we will have one table from 2023/24 when the rates are aligned.

If you would like any further information, please contact us on 01633 871122.

Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.

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