OVL Lease Blog

A revised structure of tax linked to vehicle emissions, due to be introduced for all newly registered cars from April 2020, means that until the 2022/23 tax year, there will be two BiK tax systems. 

The first system will apply to all cars registered before 6 April 2020 and tested using the NEDC test cycle. For cars registered from 6 April 2020, a new structure will apply, based on the CO2emissions data for cars tested using the new WLTP test cycle.

The WLTP test cycle is more stringent and therefore most vehicles emissions will rise.  In short, it is going to be financially beneficial to lease a car registered on or before the end of March 2020. 

Let’s look further into this.

The Government has accepted that there will be a rise, more or less across the board, in CO2 emissions, because WLTP is more stringent, and will be offering an allowance to drivers by dropping tax rates by approximately 2%. This means that if a vehicle’s emissions have gone up by 10g/km the driver should not be disadvantaged.

In reality however, most vehicles emissions will rise by more than 10g/km which means drivers will incur more charges. 

The only way, therefore, to avoid charges is to arrange a new lease car that will be registered on or before the 31st March 2020. Our team are on hand to guide you through the list of vehicles that are in stock, that can be delivered before this deadline – and of course they can ensure your needs are met in other areas – make/model/specification – too. 

It is worth pointing out that if you are midway through a lease the emissions cannot change and therefore the tax you pay is set.

Here are two examples of how emissions will change – one showing a reduction and one a significant rise.

To discuss your requirements – contact our team today.