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Car and car fuel benefit calculation to change 28 October 2019
HMRC has confirmed that, in order to reflect ever-changing society, there will be 11 new bands for Ultra Low Emission Vehicles (ULEVs) from April 2020 onwards, that will be incorporated on a separate table. This will also herald the inclusion of a separate zero emissions band. The move was proposed in order to reiterate the government’s guarantee that they will aim to improve air quality and reduce pollution across the UK and to encourage people to invest in more environmentally friendly vehicles. The guidance issued by the Software Developers Support Team (SDST) includes a ready reckoner and flow chart to help with the arduous task of applying the correct percentage bracket to Company Car Benefits. It was announced by HMRC that company car drivers using zero emission cars will pay no company car tax from 2020- 2021. This is an initiative that is being put into place in order to influence people to shift to the use of zero emission cars in a bid to help the environment. In 2021-22, the tax rate will increase to one percent before returning to the planned two percent in 2022-2023.
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Advisory Fuel Rates for Company Cars from 1 December 2019 28 November 2019
HMRC has issued details of the latest Advisory Fuel Rates (AFRs) for Company Cars which apply from 1 December 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
9p (10p)
Over 2000cc
21p
14p
Engine size
Diesel
1600cc or less
9p (10p)
1601cc to 2000cc
11p
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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