DRIVERS of low emission company cars will continue to get a discount on company car tax rates in both the 2017/18 tax year and the 2018/19 tax year it has been announced in today’s Budget (19 March).
Low emission cars are those cars with emissions up to 75g/km, ranging from the zero tailpipe emission electric BMW i3, the 27g/km Vauxhall Ampera range extender to the 71g/km Porsche Panamera 3.0 S E-Hybrid Tiptronic S.
“It is a helpful move and means that employees choosing low emission vehicles will pay a lower rate of benefit-in-kind tax than previously envisaged. It is a positive incentive to choose a low emission company car,” commented Association of Car Fleet Operators (ACFO) chairman Damian James.
All company provided cars above 75g/km will be subject to a higher rate of company car tax in the 2017/18 and 2018/19 tax years up to a maximum company car tax band of 37%.
From the 2016 tax year diesel cars will no longer receive a 3% surcharge but will be charged at the same tax rate as a similar emission petrol model.
Despite the continuing discount on company car tax rates for low emission cars, David Brennan – the managing director of leading leasing company LeasePlan – said it was not enough:
“The Government must deliver certainty, stability and greater financial incentives to the business motorist in relation to Ultra Low Emission Vehicles (ULEVs).
“While petrol and diesel models are becoming more fuel-efficient, in the longer-term increased uptake of alternatively-fuelled vehicles will be an important factor in achieving the Government’s increasingly challenging CO2 targets.
“We cannot rely on manufacturing only to deliver innovations on traditional combustion engine models.”
Despite the continuing lower levels of company car tax for low emission vehicles, there will be tax rises for drivers of electric cars.
