MARCH BUDGET WILL CONFIRM NEW COMPANY CAR TAX RATES
Posted on 17th February 2020 at 12:13
The Government has announced that the Chancellor has chosen 11th March as the date for his first Budget (the first since the general election).
Following months of uncertainty for the fleet industry, it is expected that the Chancellor will now adopt the new benefit in kind (BIK) tax rates announced last summer.
On publishing the new rates in July 2019, the Government said it would bring forward legislation to implement them from April 2020. The legislation was due to be introduced in the Finance Bill, which would have followed an Autumn Budget. However, when the Government lost its working majority in the House of Commons and struggled to push through its Brexit withdrawal agreement, it cancelled the planned Budget on 6th November after winning a vote in the House of Commons to hold a general election on 12th December.
The delay further amplified uncertainty for the fleet industry, with fleet decision makers and company car drivers not knowing their tax liabilities for future years. The Budget will allow the new rates to be adopted into law and, with the passage of the Finance Bill through Parliament expected to go beyond 6th April (when they should become effective), it is understood the legislation will allow them to be backdated.
For cars first registered from 6th April 2020, most company car tax rates were due to be reduced by two percentage points with a new zero percentage rate for pure electric vehicles (EVs). The zero percentage rate was also extended to EVs registered prior to 6th April, 2020, who were already looking forward to a much reduced rate of 2% for 2020/21.
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