Great news for employees. The Treasury has confirmed that company car drivers who choose an emissions-free electric fleet model will pay no benefit-in-kind (BIK) tax for the year as part of new efforts to encourage motorists to switch to green vehicles.

Those who choose pure electric models will pay 0% company car tax for the year from April 2020. From 2021, the benefit will be calculated at 1% of company car value and 2% from April 2022.  

 
Plug-in hybrid cars will also qualify for 0% BIK if they emit less than 50 grams per kilometre of CO2 and are able to travel for at least 130 miles as a pure electric vehicle. However, there is one significant problem: the charging infrastructure in the UK is less than adequate to say the least.

Plug-in hybrids with an official electric range of less than 30 miles will be subject to 12% BIK from April next year, which is still less than a car powered solely by a combustion engine.

Also, CO2 measurements will be likely to rise after a review of emissions regulations by the new Worldwide Harmonised light Vehicle Test procedure (WLTP). The Government aims to announce appropriate percentages at least two years ahead of implementation to provide certainty for employers, employees and fleet operators.

 

Noel Guilford