Electric Cars Company Car Tax 2020

How does the electric car tax credit work.

Electric cars company car tax 2020.

Earlier this year the government revealed electric vehicles will be exempt from company car tax in the 2020 21 tax year. Introduced in 2002 company car tax applies to cars bought by employers for their employees private use. The annual company car tax in 2020 would be 20000 x 10 x 20 which is 400. In its long awaited response to its review of wltp and vehicle taxes.

Best hybrid plug in and electric cars of 2019 12 cheapest electric cars right now 16 best convertibles of 2020 2020 honda civic vs. The new company car tax band tables for 2020 to 2023 is set out below. The measure was brought in to encourage both businesses and workers to choose low emission vehicles. Electric cars are exempt from vehicle excise duty otherwise known as road tax and for the 2020 21 financial year beginning 6 april 2020 they re exempt from company car tax too.

As with car tax and company car tax the rate at which a company can write down the value of company vehicles is based on its co2 emissions. Learn more about installing workplace ev charging. The government says that company car drivers choosing a pure electric vehicle will pay no benefit in kind bik tax in 2020 21. With the recent change of bik rates in april 2020 all bevs pay no company car tax in 2020 21 just 1 in 2021 22 and 2 in 2022 23 a further increased uptake of fully electric company cars is to be expected.

As a milestone decision this is the first opportunity for company cars to be taxed at 0 as a benefit in kind bik helping businesses make the transition to zero emission vehicles and a potentially emission free future. In 2021 22 they will attract a bik rate of only one per cent. Therefore for a pure electric vehicle with zero tailpipe emissions company car drivers will be taxed at 0 and pay no tax on the benefit in kind bik at all. Cars registered from april 6 2020.

For a basic rate taxpayer with a 2020 registered vehicle value of 20 000 with emissions of 30 g km and an electric range of 30 miles. For cars newly registered from 6 april 2020 the majority of company car tax rates will be reduced by two percentage points.