There is a steep 3% increase in company car tax rates from 6 April.
Percentage charges for the current year and for 2019/20 are:
CO2 g/km |
0-50 |
51-75 |
76-94 |
95 and above |
2018/19 |
13% |
16% |
19% |
20% + 1% per 5g/km over 95g/km |
2019/20 |
16% |
19% |
22% |
23% + 1% per 5g/km over 95g/km |
The maximum percentage charge is capped at 37%. For diesel cars, a 4% surcharge is added when calculating the percentage tax charge, subject to the 37% maximum.
Measuring CO2 emissions
There has also been much uncertainty about changes to the way cars’ CO2 emissions will be measured.
The change could push up a car’s CO2 emissions by several percentage points, but the government will not be reviewing the impact until this spring. CO2 emission figures for company cars will be based on the new worldwide harmonised light vehicle test procedure (WLTP) from April 2020. Until then, cars undergoing the new test will be given a CO2 emission figure correlated to the old basis of measurement.
The correlated figures are, however, resulting in higher percentages than the previous basis, and this disparity will worsen once true WLTP emission figures are used.
Ultra-low emission vehicles
If you are planning to change your company car and want to keep the tax cost to a minimum, then look ahead to the new ultra-low emission regime coming in for 2020/21. From 6 April 2020, the percentage charge will be just 2% for a car with zero emissions, or for a plug-in electric vehicle with CO2 emissions of 1–50g/km and with an electric range of 130 miles or more. The percentage increases as the electric range reduces.
The electric range is the maximum distance that can travelled in pure electric mode without recharging the car’s battery or using the combustion engine of the plug-in vehicle.
Increasing tax costs make vehicle selection even more important. If you would like to discuss how you might be affected, please get in touch.