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Ultra-Low Emission Vehicles 19 December 2019
In the December 2019 edition of the Employer Bulletin (Employer Bulletin 81), reference was made to proposed changes that will impact Ultra-Low Emission Vehicles from the turn of the new tax year.
The changes were first addressed in the preceding issue of the Employer Bulletin – the October 2019 issue, or Employer Bulletin 80, where it was advised that the Government wanted to support its commitment to improving the air quality in towns and cities. In order to do this, there would be adjustments to car and car fuel benefit calculations and lower tax bands for cars that are less detrimental to the environment. 11 new bands will be introduced for Ultra-Low Emission Vehicles (ULEVs) including a separate zero emissions band. Where a car’s Co2 emission figure Is between 1-50g/km, the car’s zero emission mileage would need to be recorded in place of the Co2 emission figure for the purpose of tax calculations. The zero-emission mileage figure relates to the maximum distance the car can travel in electric mode prior to having to recharge the battery. In the most recent Employer Bulletin, further guidance is provided relating to reporting a new company car or one that is made available to an individual for the first time in the 2020/2021 tax year. From 6 April 2020, the form P46 (car) will include a new field and where the car has a Co2 emission figure of 1-50g/km, the car’s zero emission mileage will need to stated here. The bands have not yet been released but the proposed revisions can be found here. The percentage of tax applied to the company car benefit will be based on miles travelled and not just Co2 emissions. The guidance provided is as follows:
“From 6 April 2020, the graduated table of company car tax bands will now include a differential for cars with emissions of 1 to 50 gCO2 per km based on the electric range of the car.
For cars with an electric range of 130 miles or more, the appropriate percentage is 2%; for cars with an electric range of between 70 to 129 miles, the appropriate percentage is 5%; for 40 to 69 miles, the appropriate percentage is 8%; for 30 to 39 miles, the appropriate percentage is 12% and for less than 30 miles, the appropriate percentage is 14%.
For cars that can only be driven in zero-emission mode, the appropriate percentage is 2%.”
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Advisory Fuel Rates for Company Cars from 1 March 2020 25 February 2020
HMRC has issued details of the latest Advisory Fuel Rates (AFRs) for Company Cars which apply from 1 March 2020.
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
10p (9p)
Over 2000cc
20p (21p)
14p
The Chartered Institute of Payroll Professionals
Payroll: need to know
cipp.org.uk
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