Currently a driver pays 0% company car tax for a zero emission vehicle, such as a BMW i3. However, the tax rises to 5% in 2015/16, 7% the following tax year and up to 9% in the 2017/18 tax year, while going up to 13% in the 2018/19 tax year – a steep rise as ACFO’s Damian James admits:
“The rates announced still mean that an employee choosing a company car with emissions up to 50 g/km, such as an electric car, will go from paying 0% benefit-in-kind tax in 2013/14 and 2014/15 to 5% in 2015/16, 7% in 2016/17, 9% in 2017/18 and 13% in 2018/19, which is a series of steep increases.”
Company cars with CO2 emissions in the range of 1-50g/km – such as the Ampera – will see their company car tax bandings rise from 5% (or 8% if a diesel car) where it is now to:
- 7% in 2015/16 tax year
- 9% in the 2014/15 tax year
- 13% in 2016/17 tax year
- 16% in in 2018/19 tax year
Low emission company cars with CO2 emissions between 51g/km to 75g/km – such as the Porsche Panamera Hybrid – will see the company car tax bands rise from 5% in the 2014/15 tax year to:
- 9% in the 2014/15 tax year (12% for diesels)
- 11% in 2015/16 tax year
- 13% in 2017/18 tax year
- 16% in 2018/19 tax year
However, Gerry Keaney, boss of the BVRLA, was more scathing.
“A business driver thinking about choosing an expensive zero-emission vehicle this year will see their company car tax rate rise from nothing to 13% within four years. Their cost of motoring will rise much faster than someone choosing a gas guzzler,” he said.
“Any cost benefit this industry might have received from the abolition of the 3% diesel supplement in 2016 has been dragged back and by 2018/19 company car drivers will be contributing an extra £480m in annual tax revenues.”
The latest company car tax tables
See how the changes pan out. Click here: Company car tax tables for tax years 2014/15 to 2018/19
