Measures on ‘Taxable benefits and rules for measuring carbon dioxide emissions’ which were first announced in Budget 2017, have been confirmed in the 2019-20 Finance Bill and will have effect from 6 April 2020.
• For cars first registered from 6 April 2020, most company car tax rates will be reduced by 2ppt in 2020-21 before returning to planned rates over the following two years – increasing by 1ppt in 2021-22 and 1ppt in 2022-23. • To accelerate the shift to zero emission cars, all zero emission models will pay no company car tax in 2020- 21, 1% in 2021-22 before returning to the planned 2% rate in 2022-23.
The changes follow a review into the impact of the Worldwide harmonised Light vehicles Test Procedure (WLTP) on Vehicle Excise Duty and company car tax.
With regard to Vehicle Excise Duty, a call for evidence will be published later this year seeking views on moving towards a more dynamic system which recognises smaller differences in carbon dioxide (CO2) emissions.
The amendments also clarify that, for the purposes of CCT and related charges, cars first registered on or after 1 October 1999 but before 6 April 2020 will continue to be taxed on the basis of the CO2 emissions figure measured under the NEDC procedure.
The legislation remains unchanged for cars first registered before 1 October 1999.
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Advisory Fuel Rates for Company Cars from 1 September 2019 29 August 2019
HMRC has issued details of the latest Advisory Fuel Rates (AFRs) for Company Cars which apply from 1 September 2019.
For one month from the date of change, employers may use either the previous or new current rates, as they choose. Employers may therefore make or require supplementary payments if they so wish, but are under no obligation to do either.
The new rates are below (previous rate in brackets where there is a change):
Engine size
Petrol
LPG
1400cc or less
12p
8p
1401cc to 2000cc
14p (15p)
10p (9p)
Over 2000cc
21p (22p)
14p
Engine size
Diesel
1600cc or less
10p
1601cc to 2000cc
11p (12p)
Over 2000cc
14p
Hybrid cars are treated as either petrol or diesel cars for this purpose.
Follow this link for details on how the rates are calculated
Advisory Electricity Rate The Advisory Electricity Rate for fully electric cars is 4 pence per mile. Electricity is not a fuel for car fuel benefit purposes.
The Chartered Institute of Payroll Professionals
Payroll: need to know
cipp.org.uk
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