Electric cars to be exempt from company car tax

The Treasury has axed all benefit-in-kind tax on battery-powered cars from next year

 

Businesses looking to add electric cars to their fleets are set for a boost next year — with zero-emission vehicles set to be exempt from company car tax in 2020.

Following a review of the changes to the new Worldwide Harmonised Light Vehicle Test Procedure (WLTP) regulations, the Treasury has abandoned benefit-in-kind charges (BiK) on electric cars next year.

As a result, cars emitting less than 50g/km of CO2 and capable of at least 130 miles of electric range will be covered by a 0% BiK rate from April 6 next year. This theoretically stretches to hybrids and plug-in hybrids as well, although no models fitting these criteria are currently available in the UK.

Charges will apply from the 2021/22 financial year though, with a 1% BiK rate on these vehicles, which will increase to 2% in 2022/23. A 2% rate had originally been planned to be applied in 2020/21.

   

A statement from the Treasury said it “recognises the value of the company car market in supporting the transition to zero-emissions technology” and also considers that by encouraging more company car drivers into low-emission cars, it can help generate “a competitive second-hand market in these vehicles”.

   

For the best independent and impartial car buying advice on the internet, always check with The Car Expert:

  • Subscribe to our newsletter for weekly tips and the latest offers from car manufacturers
  • Follow us on Facebook and Twitter to see our latest articles as soon as we publish them
  • Bookmark our site so you can check back regularly
Stuart Masson
Stuart Massonhttps://www.thecarexpert.co.uk/
Stuart is the Editorial Director of our suite of sites: The Car Expert, The Van Expert and The Truck Expert. Originally from Australia, Stuart has had a passion for cars and the automotive industry for over thirty years. He spent a decade in automotive retail, and now works tirelessly to help car buyers by providing independent and impartial advice.

The Car Expert partners

Our commercial partners. Click on the logos for more information and special offers

Electric cars to be exempt from company car tax 1
Electric cars to be exempt from company car tax 2
Electric cars to be exempt from company car tax 3
Electric cars to be exempt from company car tax 4
Electric cars to be exempt from company car tax 5
Electric cars to be exempt from company car tax 6

Latest articles

How to avoid car sickness

Car sickness is a common problem for many of us. We've put together this list of tips for keeping a queasy stomach under control on a road trip.

All-new Skoda Octavia revealed

Skoda has revealed its all-new Octavia, with hybrid technology and a new look for the model debuting.

Mazda 3 saloon SkyActiv-X review

The Mazda 3 saloon is attractive but sales are unlikely to rival its hatchback sibling. The Skyactiv-X petrol engine, however, is a very clever bit of kit.

Volvo offers free electricity to UK plug-in buyers

Volvo has launched a new offer to reimburse UK buyers of its plug-in hybrid models with a year’s worth of electricity costs.

What are your thoughts? Let us know below.

Be the first to know

Would you like to stay up to date with The Car Expert?