UNCERTAINTY OVER COMPANY CAR TAX RATES
Posted on 15th December 2019 at 14:40
The fleet industry is hoping the general election does not derail new company car tax tables announced in the summer.
The tax rates published in the summer showed that 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 at a much reduced rate of 2% for 2020/21.
Following the publication of the new rates in the summer, the Government said it would bring forward legislation to implement these changes from April 2020.
The legislation was due to be introduced in the Finance Bill, which would have followed an Autumn Budget. However, because the Government lost its working majority in the House of Commons and struggled to push through its Brexit withdrawal agreement the planned budget on 6th November was cancelled and after winning a vote in the House of Commons a general election will be held on 12th December.
After the general election, the new Government will now have to pass legislation for the rates to take effect. The legislation could be retrospective however, so doesn’t necessarily have to be passed before April 2020.
A new Conservative administration would be expected to adopt the company car rates as planned. Labour and the Liberal Democrats have also vowed to incentivise the cleanest vehicles but whether or not these rates would apply is yet unknown.
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