UK’s electric car owners to pay no company car tax in 2020

by Lawrence Allan, Autocar UK 10 Jul 2019


Changes to the UK’s company car tax system will mean drivers choosing a pure electric car pay no benefit-in-kind charges from next year.

After a review of the industry changes brought about by the new Worldwide Harmonised Light Vehicle Test Procedure (WLTP) emissions regulations, the Treasury has axed its previously published rates in favour of a new system.

It will mean that, for cars registered from April 6th next year, most benefit-in-kind rates will be reduced by two percentage points over the current system. For EVs, that means a zero percentage rate, which is also extended to vehicles registered prior to April 6th. 

That figure will also apply to hybrids and plug-in hybrids that are capable of 130 miles or more of pure electric range, with official CO2 emissions of between 1-50g/km - although no such models currently exist in the UK market.

However, the free ride won’t last long for EV users. Current plans are for the 0 percent rate to increase to 1 percent by 2021/22 and 2 percent in 2022/23, although the government says they 'remain under review'.

In a statement the government claims the new figures will give businesses “the ability to make more informed decisions about how they make the transition to zero-emission fleets”.

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