Company car tax

No changes were announced. We will have to wait until Spring 2019 before the government plans to report on how company car tax will work in April 2021 and beyond.

Since September 2017, the CO2 values of vehicles have been derived increasingly from WLTP testing, and converted back to NEDC equivalent figures through the use of the CO2MPAS tool. Although this process increases official CO2 figures and consequently raises company car tax, no adjustment will be made to the current tax calculation method and thresholds currently in place.

From April 2020 new cars will only be issued with WLTP figures so company car tax on those vehicles will jump up again when compared to the same vehicles registered the month before.

Given the implications WLTP is currently having on company car tax and Vehicle Excise Duty (VED), it was hoped that Chancellor Philip Hammond would provide some welcome news in the Autumn Budget. However the only mention in the papers is “The government will review the impact of WLTP on Vehicle Excise Duty (VED) and company car tax (CCT) to report in the spring.”

So we remain in the dark as to what tax rates will be in 2021/22 and 2022/23. The industry has been slow to get to grips with WLTP testing and publication of results, so not surprisingly the government still has little idea of how best to design a new tax regime which earns revenue as well as promoting low emission vehicles. And now it has to deal with air quality considerations in addition.

On the Comcar website we will use the latest known figures for future years and hope that this gives a rough idea of what to expect.

Car fuel benefit

The multiplier has increased with inflation to £24,100 for 2019/20. Fuel prices rose much faster over the last 12 months but that doesn't mean this represents "good value". For instance a driver of a 119 gm diesel (at 31% appropriate BIK rate) would need to use over £7,471 of fuel on private journeys for this perk to be worthwhile.

VED

Expect a small increase in line with inflation from April 2019, apart from HGV VED which will be frozen for another year.

Van VED bands and rates will be changed from April 2021 to introduce environmental incentives.

Fuel duty

Frozen for the ninth successive year. 

Van tax on private use

Inflationary increases have been applied for 2019/20 to increase:

  • Van benefit to £3,430
  • Van fuel benefit to £655