Company car drivers choosing a pure electric vehicle will pay no benefit-in-kind (BIK) tax in 2020/21 but with infrastructure still in its infancy, is now the right time to move your business into Electric Vehicles?
News that HM Treasury has scrapped previously published BIK rates for 2020/21 has given EV company car drivers some very positive news. They have replaced the previous BIK rates with two new BIK tables for company car drivers; a table for those driving a company car registered after April 6, 2020, and one for those driving a company car registered before April 6, 2020 (see tables below).
HM Treasury says that for cars first registered from April 6, 2020, most company car tax rates will be reduced by two percentage points.
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!
Furthermore, the zero percent 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.
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.
However, 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.
From 2023/24, fleets will have one BIK tax table again as the rates are realigned.
The 4% diesel premium on published BIK rates remains, but cars classed as RDE2 will still be exempt from the charge.
Company car tax for cars registered before April 6 2020
CO2 (g/km) | Electric range (miles) | 2020-21(%) | 2021-22(%) | 2022-23(%) |
|---|---|---|---|---|
0 | N/A | 0 | 1 | 2 |
1-50 | >130 | 2 | 2 | 2 |
1-50 | 70-129 | 5 | 5 | 5 |
1-50 | 40-69 | 8 | 8 | 8 |
1-50 | 30-39 | 12 | 12 | 12 |
1-50 | <30 | 14 | 14 | 14 |
51-54 | 15 | 15 | 15 |
|
55-59 | 16 | 16 | 16 |
|
60-64 | 17 | 17 | 17 |
|
65-69 | 18 | 18 | 18 |
|
70-74 | 19 | 19 | 19 |
|
75-79 | 20 | 20 | 20 |
|
80-84 | 21 | 21 | 21 |
|
85-89 | 22 | 22 | 22 |
|
90-94 | 23 | 23 | 23 |
|
95-99 | 24 | 24 | 24 |
|
100-104 | 25 | 25 | 25 |
|
105-109 | 26 | 26 | 26 |
|
110-114 | 27 | 27 | 27 |
|
115-119 | 28 | 28 | 28 |
|
120-124 | 29 | 29 | 29 |
|
125-129 | 30 | 30 | 30 |
|
130-134 | 31 | 31 | 31 |
|
135-139 | 32 | 32 | 32 |
|
140-144 | 33 | 33 | 33 |
|
145-149 | 34 | 34 | 34 |
|
150-154 | 35 | 35 | 35 |
|
155-159 | 36 | 36 | 36 |
|
160+ | 37 | 37 | 37 |
* Add 4% for diesel cars up to a maximum of 37% (unless the car is RDE2 compliant). Diesel plug-in hybrids are classed as alternative fuel vehicles, so the 4% diesel supplement does not apply to these vehicles irrespective of RDE2 compliance
Company car tax for cars registered from April 6 2020
CO2 (g/km) | Electric range (miles) | 2020-21(%) | 2021-22(%) | 2022-23(%) |
|---|---|---|---|---|
0 | N/A | 0 | 1 | 2 |
1-50 | >130 | 0 | 2 | 2 |
1-50 | 70-129 | 3 | 4 | 5 |
1-50 | 40-69 | 6 | 7 | 8 |
1-50 | 30-39 | 10 | 11 | 12 |
1-50 | <30 | 12 | 13 | 14 |
51-54 | 13 | 14 | 15 |
|
55-59 | 14 | 15 | 16 |
|
60-64 | 15 | 16 | 17 |
|
65-69 | 16 | 17 | 18 |
|
70-74 | 17 | 18 | 19 |
|
75-79 | 18 | 19 | 20 |
|
80-84 | 19 | 20 | 21 |
|
85-89 | 20 | 21 | 22 |
|
90-94 | 21 | 22 | 23 |
|
95-99 | 22 | 23 | 24 |
|
100-104 | 23 | 24 | 25 |
|
105-109 | 24 | 25 | 26 |
|
110-114 | 25 | 26 | 27 |
|
115-119 | 26 | 27 | 28 |
|
120-124 | 27 | 28 | 29 |
|
125-129 | 28 | 29 | 30 |
|
130-134 | 29 | 30 | 31 |
|
135-139 | 30 | 31 | 32 |
|
140-144 | 31 | 32 | 33 |
|
145-149 | 32 | 33 | 34 |
|
150-154 | 33 | 34 | 35 |
|
155-159 | 34 | 35 | 36 |
|
160-164 | 35 | 36 | 37 |
|
165-169 | 36 | 37 | 37 |
|
170+ | 37 | 37 | 37 |
* Add 4% for diesel cars up to a maximum of 37% (unless RDE2 compliant). Diesel plug-in hybrids are classed as alternative fuel vehicles, so the 4% diesel supplement does not apply to these vehicles irrespective of RDE2 compliance
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