• No Company Car Tax on Electric Vehicles, Says Government

No Company Car Tax on Electric Vehicles, Says Government

The Government says that company car drivers choosing a pure electric vehicle will pay no benefit-in-kind (BIK) tax in 2020/21.

Instead, it has created 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 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 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.

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 Government says that “by providing clarity of future the appropriate percentages, businesses will have the ability to make more informed decisions about how they make the transition to zero-emission fleets”.

It added: “Appropriate percentages beyond 2022-23 remain under review and will be announced at future fiscal events.

“The Government aims to announce appropriate percentages at least two years ahead of implementation to provide certainty for employers, employees and fleet operators.”

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Company Car Tax For Cars Registered Before April 6th 2020:

Cars First Registered Before 6th April 2020    
CO2 (g/km)Electric range (miles)2020-21 (%)2021-22 (%)2022-23 (%)
0N/A012
1-50>130222
1-5070-129555
1-5040-69888
1-5030-39121212
1-50<30141414
51-54 151515
55-59 161616
60-64 171717
65-69 181818
70-74 191919
75-79 202020
80-84 212121
85-89 222222
90-94 232323
95-99 242424
100-104 252525
105-109 262626
110-114 272727
115-119 282828
120-124 292929
125-129 303030
130-134 313131
135-139 323232
140-144 333333
145-149 343434
150-154 353535
155-159 363636
160+ 373737

* Add 4% for diesels 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

Company Car Tax For Cars Registered From April 6th 2020:

Cars First Registered From 6th April 2020    
CO2 (g/km)Electric range (miles)2020-21 (%)2021-22 (%)2022-23 (%)
0N/A012
1-50>130012
1-5070-129345
1-5040-69678
1-5030-39101112
1-50<30121314
51-54 131415
55-59 141516
60-64 151617
65-69 161718
70-74 171819
75-79 181920
80-84 192021
85-89 202122
90-94 212223
95-99 222324
100-104 232425
105-109 242526
110-114 252627
115-119 262728
120-124 272829
125-129 282930
130-134 293031
135-139 303132
140-144 313233
145-149 323334
150-154 333435
155-159 343536
160-164 353637
165-169 363737
170+ 373737


* Add 4% for diesels 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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