Government Removes EV Company Car Tax For 2020/21

It has been widely reported this week that the UK government has announced that all zero emission company cars will not be required to pay benefit-in-kind (BIK) tax for 2020/21.

HM Treasury published its decision following its review of the Worldwide Harmonised Light Vehicle Test Procedure (WLTP) emissions regulations last year. “The introduction of WLTP provides an opportunity to strengthen the link between the vehicle tax system and the true environmental impact of car purchasing decisions, allowing consumers to make more informed decisions between model variations,” read the review.

All zero emission company cars will pay zero BIK tax in 2020/21, 1% in 2021/22, before returning to the planned 2% rate in 2022/23.

Jay Palmer, director of policy and membership at the BVRLA, said the announcement represents a positive for the market: “Recognising the value of the company car market in supporting the transition to zero emission technology is also a positive endorsement for our sector, showing refreshing alignment between government’s environmental and fiscal policies, The Treasury is giving back some of the unfair Company Car Tax windfall it was set to receive as a result of WLTP and providing some essential extra visibility on future tax costs for those looking to order their next vehicle.”

For the full news item reported in Motor Finance Online please click here

For further comment by Sue Robinson of the National Franchised Dealer Association please click here

For the full HM treasury Review please click here