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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.”

Company car tax for cars registered before April 6 2020

Cars first registered before 6 April 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 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

Cars first registered from 6 April 2020
CO2 (g/km) Electric range (miles) 2020-21 (%) 2021-22 (%) 2022-23 (%)
0 N/A 0 1 2
1-50 >130 0 1 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 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