GOVERNMENT ANNOUNCE NO COMPANY CAR TAX ON ELECTRIC VEHICLES
Posted on 6th July 2019 at 14:52
The Government have announced that company car drivers choosing a pure electric vehicle will pay no benefit in kind (BIK) tax in 2020/21.
They have created two new BIK tables for company car drivers, one for those driving a company car registered after 6th April 2020, and one for those driving a company car registered before this date.
For cars first registered from 6th April 2020, most company car tax rates will be reduced by two percentage points. This means that a pure electric vehicle with zero emissions will be taxed at 0%, paying no BIK at all.
The zero percentage rate is also extended to company car drivers in pure electric vehicles registered prior to 6th April 2020, who were already looking at a much reduced rate of 2% for 2020/21. This will further apply to company cars registered from 6th April 2020, with emissions from 1-50g/km and a pure electric range of 130 miles or more. These will then increase to 1% in 2021/22 and 2% in 2022/23. Pure electric company cars registered before 6th April 2020, will also increase to 1% in 2021/22 and 2% in 2022/23.
With this being said, company cars registered before 6th April 2020 with emissions from 1-50g/km and a pure electric mile range of 130 miles or more, will attract a 2% BIK rate in 2020/21 and stay the same for the two subsequent tax years.
The Government has also announced that the existing vehicle excise duty (VED) rates will stay the same from 6th April 2020, despite the introduction of WLTP values for tax purposes from this date.
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