First published. For cars registered from 6 April, the government seems to be standing by its pledge to reduce the UK's carbon emissions - hybrids with long electric ranges get very favourable rates and pure electric vehicles (EVs) go to 0% for 2020-21. Budget 2020: The government has confirmed a reduction of most company car tax rates by 2% in 2020/21, applicable to cars first registered from 6 April 2020.. So a range rover sport is 18% BIK but an electric is 0% BIK. Select a car to see the P11D value, CO 2 emissions and BIK rates calculated for the next three years. On an electric Renault Zoe small hatchback, that equates to a £1023 saving in BIK tax for someone in the 20% tax bracket and £2046 for a 40% taxpayer. All you need to know about company car Benefit-in-Kind (BIK) – the tax payable on the use of a company car which is based on a car's official value, its official CO2 emissions and its fuel type. Company Car BiK tax rates 2020-2023 Vehicle CO2 (g/km) Electric range (miles) FY 2020-21 %BiK Rate FY 2021-22 %BiK Rate FY 2022-23 %BiK Rate Petrol, Electric, Whether an employee 'user chooser' who receives benefit in the form of a company car, or the company providing this mobility benefit, the microsite provides all the information you need to select a low-emission and tax-efficient vehicle. 1% during 2021/22. It is planned to change to 1% in 2021/22 & 2% in 2022/23. BIK in rates. No BIK in 2020/21 for Electric Cars. While every effort has been made to reflect the above information in a correct and up to date manner, we cannot exclude the possibility that any of this information is not or no longer, especially as some of this information is subject to change by third parties. BiK, otherwise known as company car tax, can be expensive as many drivers know, but following the introduction the the WLTP (Worldwide Harmonised Light Vehicle Test Procedure) emissions regulations, the Treasury has reviewed its tax rules, and electric car drivers will be no longer be required to pay it in 2020/21. CO2: 0g/km; BIK tax band 20/21: 0%; Tax per month: from £0 BMW 3 Series Touring company car tax rates for 2020/21. Fleet World Subscribe to our magazines and email newsletters. Post was not sent - check your email addresses! Choose an electric car for 2020, and you'll pay no BIK in the first year, and just 2% in the third. BIK is 29%. Vehicles that do adhere to the standard have the supplement removed altogether. Benefit in Kind for electric vehicles for tax year 2020/21 is 0%. For most cars registered before 6 April 2020, CCT rates will not be reduced (from those previously published) in 2020-21. 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Few fleets would have been aware of the RDE test before last year’s Budget made it a core component of diesel taxation. However, for the 2020/21 financial year, the BiK rate for zero-emissions company cars was set at 0 per cent by the government, so there’s … For VED, the levy saw the first-year VED rate for non-RDE2 tested diesel cars go up by one band from April 2018, adding as much as £500 for higher-emission vehicles. 0% during 2020/21. Contents Print this page. Cars first registered after April 2020, most company car tax rates will have a 2% reduction in 2020/21 and will then rise by 1% each year after that back to the planned rate in 2022/23. 2% during 2022/23 Tax rates shown include the 0% rate for pure-electic cars, which came into effect in April 2020. If registered before 6 April 2020, BIK is fixed at 31% for the next three years. 25 February 2020. A new, more accurate testing procedure, WLTP will take over from the existing NEDC Correlated CO2 figures in April 2020. This change comes at the same time as a new set of BIK rates, prioritising electric cars. This is an on-road test, using portable equipment to measure and compare harmful emissions to the laboratory-derived results, and there is a tightening ‘conformity factor’ requiring those two figures to gradually align. Whoever coined that slogan obviously had no idea what would happen to the company car Benefit-in-Kind (BiK) tax system in the 2020/21 financial year, which started on 6 … Rates and thresholds for employers have been updated for the tax year 2020 to 2021. Vehicles registered before 6 April 2020 will see their company car tax bands frozen at the 2020/21 rates until 2022/23. The Chancellor's inability to disclose BIK rates five years in advance reverses a recent trend and subsequently fleets and their drivers running company cars into a fifth year will not be able to plan ahead. Author:Chris LillyDate Updated:22nd Jan 2021, Government considers road pricing to cover EV tax shortfall, EVs for employees as Go Ultra Low reveals environmental priorities. Simon Carr, chief commercial officer at Alphabet, said: “The announcement of 0% BIK tax rates for pure battery electric vehicles from April 2020 – followed by 1% in April 2021 and 2% in April 2022 – could see a renaissance for the company car … From 1 January 2020, newly-homologated cars move to RDE2, with a limit of 1.5 times more pollutants on the road, and this applies to all new cars one year later. all rights reserved. Benefit In Kind (BIK) is a tax on employees who receive benefits or perks on top of their salary. Company car tax was reformed in April 2002 to an emissions-based system. The 2020-2021 rates for … RDE1 allows vehicles to emit 2.1 times more pollutants on the road, and becomes mandatory for all new cars from 1 September 2019. Company car drivers who are resident in Scotland will be hit by larger increases in Benefit-in-Kind rates from 6 April, as new income tax rates are … Read More ». The joint... London's Congestion Charge and Ultra Low Emission Zone charge have been suspended until further notice, as a result of the Coronavirus outbreak. Meanwhile drivers of company cars registered after 6 April 2020 – all of which will have been tested on the more stringent WLTP cycle – actually get a 2% tax cut on the former 2020/21 rates from 1g/km upwards, with the maximum 37% BiK now not kicking in until 170g/km. BMW 3 Series Saloon company car tax rates for 2020/21. rising to 31% over the same period. The charge is calculated by applying a percentage figure (the appropriate percentage) to the list price of the car. Therefore, in 2020-21, the BiK value will be £29,790 x 0% = £0 In 2021-22, the BiK value will be £29,790 x 1% = £297.90 To get the amount your company car will cost you in tax per year, you then multiply the BiK value by your income tax banding (20-45%): £297.90 x 20% = £59.58 per year / £4.97 per month All zero-emission company cars will attract a reduced appropriate percentage of 0% in 2020/21, 1% in 2021/22, before returning to the planned 2% rate in 2022-23. Pure-EVs are rated at 0% for FY 2020/21, as the UK Government aims to encourage drivers into electric cars. Cars with a zero-emission range of at least 130 miles will face a CCT rate of 0 per cent in 2020-21. Last year’s cull of the plug-in hybrid car grant has dented the incentive and attraction for businesses to buy into plug-in hybrids, and despite the recently … Read More », Following the Government’s Benefit-in-Kind (BiK) announcement last week, Nissan is highlighting the benefits of driving electric that will see its Leaf model become tax-free from 6 … Read More ». Electric vehicles are also rewarded with lower BIK rates with battery electric cars BIK-rated at 16% for FY 2019/20, reducing to 0% during 2020/21, and then increasing to 1% and 2% for years 2021/22 and 2022/23 respectively. These figures then increase by 1% in both the 2021/22 and 2022/23 tax … As an industry example, BIK tax on an 109g/km diesel car would rise from 21 per cent in 2016/17 to 31 per cent in 2020/21. Eagle-eyed readers will notice that the quoted BiK rates for the following two diesel cars are beyond our 26 per cent threshold detailed earlier – but there is a reason for this. Brexit. BIK rates are shown from 2020 - 2023 including the 0% electric car rate , for 2020/21. From April 2021 you'll have to pay 1% BIK and 2% the year after. Here are some examples to give you an idea of the changes in BiK rates (Excluding any OpRA implications). From April 2018, the Company Car Tax diesel supplement went up by 1%, increasing to 4% for cars not meeting the RDE2 standard. Sorry, your blog cannot share posts by email. Vehicle AUDI A4 DIESEL SALOON 35 TDI S Line 4dr S Tronic 2020 Fuel Diesel P11D Value £38,225.00 Electric vehicles are also rewarded with lower BIK rates with battery electric cars BIK-rated at 16% for FY 2019/20, reducing to 0% during 2020/21, and then increasing to 1% and 2% for years 2021/22 and 2022/23 respectively. These figures then increase by 1% in both the 2021/22 and 2022/23 tax years, from when the 37% BiK threshold returns to 170g/km. Summary of the key points as follows: A zero rate of BIK tax for EVs from next April for tax year 2020-21, rising to 1% in 2021-22 and 2% in 2022-23 A 2% reduction in scale charge from next April for cars registered after April 6 2020, with a 1% discount in 2021-22 A freeze on existing 2020-21 BIK rates for the following two years Check how the new Brexit rules affect you. Below is a list of currently available new models showing a starting rate for a 20% tax payer. Higher mileage drivers may find the range and charging times of some cars may not be suitable for the type of journeys they do. But otherwise you’ll be driving a great company car in the 2020/21 tax year and paying the HMRC a big fat zero in BIK. These rates will then be increased by 1 percentage point in 2021-22 and then another percentage point in 2022-23. Click to email this to a friend (Opens in new window), Click to share on Twitter (Opens in new window), Click to share on Facebook (Opens in new window), Click to share on LinkedIn (Opens in new window), Click to share on Pocket (Opens in new window), Click to share on WhatsApp (Opens in new window). When this car is registered will affect the rate paid after 2020. Copyright © The changes mean that those drivers with vehicles registered before 6 April 2020 will see their company car tax bands frozen at the 2020/21 rates up to and including 2022/23. Light commercial vehicle deadlines are 12 months later than those for passenger cars, outlined below: Diesel surcharges for non-RDE2 diesel cars. The latter measure even extends to electric cars registered before 6 April. click here . The Times has reported that the UK government is planning a road tax to cover EV shortfall. The microsite also provides information for companies and employers about the cost benefits of greener fleets including Class 1A NICs and Enhanced Capital Allowances for low carbon cars. Fleets will already be familiar with the ‘Euro’ emissions standards, introduced in 1992. For more information on the 2018 Autumn Budget . BIK rates 2021 - BIK Tax Bands UK - Find BIK 2020/21 BIK rates for 2020 - 2023 - table showing Company Car Tax BIK rates by CO2 emission for diesel and non-diesel cars. But Euro 6 – notable for almost closing the gap between diesel and petrol NOx emissions – isn’t a one-stage process, and it is also linked to the roll-out of WLTP and RDE. The announcement, which sees company car benefit-in-kind tax rates for zero emission cars in 2020/21 cut to 0% from the previously announced 2% but all other already published rates remaining unchanged for cars registered before April 6, 2020, sees reduced rates for cars first registered from April 6, 2020. It will also see zero-emission company cars paying no tax. This change is expected to increase most cars’ reported CO2 figures by 10-20%, having an inflationary impact on emissions-based CO2 taxes like CCT and VED. Next Green Car's company car tax microsite provides comprehensive information about UK company car tax, including its link with CO2 emissions, 'Benefit-in-Kind' (BIK), current and future BIK rates, and a calculator to check the company car tax for specific models. RDE2 compliant diesels will be exempt from the 4% Benefit-in-Kind surcharge. "On an optimistic note, the announcement of 0% BIK tax rates for pure battery electric vehicles from April 2020 - followed by 1% in April 2021 and 2% in April 2022 - … document.write(new Date().getFullYear()); Firstly, the 0% BIK is only available in the 2020/21 tax year. We use cookies to offer you the best experience of our website, including your site preferences and providing relevant advertising. Furthermore, the zero percentage rate 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. Select a car to see the P11D value, CO 2 emissions and BIK rates calculated for the next three years. Mercedes-Benz will launch the new B-Class MPV with an RDE2-certified diesel engine, which should mean it avoids the UK’s 4% Benefit-in-Kind surcharge. Company car tax rates for 2023-24 and 2024-25 will be kept at 2022-23 rates * Add 4% for diesels up to a maximum of 37% (unless RDE2 compliant). Benefit in kind (BIK) for employers What is benefit-in-kind? www.nextgreencar.com . Ride is on the firm side, so you need to be aware of that. With many EVs being exempt from vehicle excise duty (VED) — what many call ‘road... Employees reckon electric vehicles (EVs) can play a key role in companies improving their environmental credentials, according to a study by Go Ultra Low. This will rise to 1% in 2021-22, and 2% in 2022-23. The benefit-in-kind tax rates will return to planned levels over the subsequent years: by 1% in 2021/22, and 1% in 2022/23. If you have a company car that is available for private use, this means you will have to pay a BIK Government has not yet published applicable BIK tax rates beyond tax year 2020/21. The long-awaited results of the Government’s WLTP review bring an announced freeze on company car tax for fleet cars and the introduction of a zero Benefit-in-Kind (BiK) rate for fully electric cars. Plus you have access to Tesla’s Supercharger network where you can get up to 80% charge in 30 minutes. No matter the registration date, pure electric cars with zero tailpipe emissions and certain plug-in hybrid cars will be taxed by the following BIK percentages (company car tax rates) for the next three tax years. Two new BIK tables with any cars registered before April 2020 with fixed rates until 2023 (based on the previously planned rates for 2020/21). Taken on their CO2 emissions alone, both cars would be subject to a maximum BiK rate of 26 per cent between now and the 2020/21 tax year. There will be 18 emission bands, as of 2019/20 , which you … Below is a list of currently available new models showing a starting rate for a 20% tax payer. BIK tax rates are determined in part by using the amount of CO2 emissions the car releases. If registered after 6 April 2020. From 2020, the appropriate percentages for zero emission cars will drop from 16% to 2%, while those for cars with CO2 emissions between 1g/km and 50g/km will vary between 2% and 14% depending on the number of zero-emission miles the vehicle can travel. PHEVs recieve extremely low rates as before, but these are now graded based on the pure-electric range available. That means for a pure electric vehicle with zero tailpipe emissions, company car drivers will be taxed at 0%, paying no BIK tax at all. There are some pitfalls, however. Professor Colin Tourick is unconvinced by the company car tax reforms announced in the latest Budget. The government has also announced a zero rate of BiK tax for EVs for the 2020-21 tax year. While company car tax is a key cost issue, other vehicle taxes such as Vehicle Excise Duty or 'car tax' continue to apply – see the car tax microsite for more information. Addressing the cliff-edge in company car benefit-in-kind (BiK) tax rates and bringing forward the 2% rate to 2019/20 could help drive ULEV uptake. Taxation of benefit-in-kind; Valuation of benefits All you need to know about company car Benefit-in-Kind (BIK) – the tax payable on the use of a company car which is based on a car's official value, its official CO2 emissions and its fuel type. 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