Government finally announces its plans for the future of fleet

Government finally announces its plans for the future of fleet
marc.murphy

Posted by

Marc Murphy

July 2019

In its long-awaited response to its WLTP review, HM Treasury has scrapped the previously published BIK rates for 2020/21 and created two new BIK tables: one for company cars registered after April 6, 2020, and one for those registered before April 6, 2020.

As a result, says HM Treasury, cars first registered from April 6, 2020, should see a reduction by 2% on most company car tax rates.

At the same time, for a pure EV with zero tailpipe emissions, company car drivers will be taxed at 0%, paying no BIK tax at all. The 0% is also extended to company car drivers in pure electric vehicles registered prior to April 6, 2020, who were already looking forward to a much-reduced rate of 2% for 2020/21.

The 0% rate will also apply to company cars registered from April 6, 2020, with emissions from 1-50g/km and a pure electric mile range of 130 miles or more. Both will then increase to 1% in 2021/22 and 2% in 2022/23.

Pure electric company cars registered before April 6, 2020, will also increase to 1% and 2% in subsequent years, 2021/22 and 2022/23 – giving EV drivers three years of confirmed tax rates.

Company cars registered before April 6, 2020, with emissions from 1-50g/km and a pure electric mile range of 130 miles or more attract a 2% BIK rate in 2020/21 and stay the same for the two subsequent tax years.

In its announcement, the Government said that “by providing clarity of future with the appropriate percentages, businesses will have the ability to make more informed decisions about how they make the transition to zero-emission fleets”.

It added: “Appropriate percentages beyond 2022-23 remain under review and will be announced at future fiscal events.

“The Government aims to announce appropriate percentages at least two years ahead of implementation to provide certainty for employers, employees and fleet operators.”

The Government added that existing vehicle excise duty (VED) rates, which were not part of this review, will stay the same from April 6, 2020, despite the introduction of WLTP values for tax purposes from this date.

The Government says that a call for evidence for VED will be published later this year, seeking views on moving towards a “more dynamic approach to VED”, which recognises smaller changes in CO2 emissions.

From 2023/24, the Government says that fleet managers and company car drivers will be able to refer to a single BIK tax table again as the rates will be realigned.

Please see new tables below:


You also might like…

If you liked this artcle then check out our posts about similar topics

Your questions answered following Government’s WLTP review

Last month, the Government announced the results of its review into the impact of the WLTP emissions test on company car...

Government looks at ways of increasing electric vehicle charging

The Government is looking at ways of increasing the opportunities for charging of electric vehicles, including charge po...

PHEV sales fall 30% following Government U-turn on funding

Sales of plug-in electric hybrids (PHEVs) have fallen by almost 30% in the first six months of this year, according to t...

Government announces new BIK rates and zero tax for EVs, following WLTP review

The Government has announced new Benefit-in-Kind rates which amount to a 2% tax cut for some drivers from April, a freez...

Fleet Alliance breaks billion pound barrier with increased 37,000 vehicle fleet

Fleet Alliance Group, the award-winning Glasgow based vehicle leasing company, now manages a fleet valued at £1billion ...

Essential tips for driving abroad this summer

Drivers planning on taking their cars to Europe this summer need to be aware of a number of do’s and don’ts before s...

Filling stations begin to roll out new fuel labels

The Government has launched a new campaign to inform drivers of the biofuel content of petrol and diesel, to urge them t...

Coventry to be home for new EV battery centre of excellence

The Government has announced that Coventry will be home to a new national centre of excellence in developing the latest ...

Ready to make the management of your fleet more efficient?

Request a call back


Or Call Us On: 0345 601 8407
Schedule a call back
  • This field is for validation purposes and should be left unchanged.