2015/2016 Company car tax changes at a glance
- Electric vehicles (zero emission) now also liable for the same 5% company car tax rate as the lowest polluting cars
- The lower rate for Ultra Low Emission Vehicles is also ending and is now split into two groups
- Company car tax bands have moved up two percentage points compared to 2014/15: a 99g/km diesel is now rated at 17% on the company car tax banding scale
- The company car tax rate for the biggest polluting vehicles has gone up from 35 to 37%
- From 2016/17 tax year, the 3% surcharge on diesels is removed
So what’s changed and how will it affect me?
Pick the lowest polluting car, basically with anything up to 50g/km and you’ll have to just pay a five per cent BIK (Benefit In Kind) company car tax banding rate.
On the flip side, if you’re in the fortunate position to be looking at one of the biggest polluters with a CO2 figure over 220g/km, it may or may not bother you to know that BIK rates for these usually premium cars, has jumped from 35 to 37%.
We doubt that this jump in BIK company car tax rates will make much difference to the user choosers in this latter category, but we reckon some might see this increase as the perfect catalyst to trade down to more efficient models, such as the sold out BMW i8 with the hybrid supercar’s 49g/km CO2 figure.
One of the biggest changes for the 2015/2016 tax year is that electric vehicles, which were previously exempt from company car tax, are now also liable for the same five per cent BIK rate.
Another, is that the lower tax rate for ultra low emission cars is also ending, with them split into two bands 0-50g/km (5%, diesels 8%) and 51-75g/km (9%, diesels 12%).
