Budget 2013: company car tax changes


Headlines

  • Changes to low-emission car taxation
  • Electric and plug-in hybrid cars affected

Details


The Government has introduced changes to the Benefit-in-Kind system in an effort to encourage the use of low CO2-emitting vehicles.

Primarily affecting those driving cars emitting less than 75g/km, there's a pair of new company car tax bands set to be bought in from April 2015.

The first is for cars emitting between 0 and 50g/km, and those cars will be in for company car tax at 5% in 2015/2016, rising to 7% in 2016/2017.

The second band is for cars emitting between 51g/km and 75g/km will incur tax at 9% for 2015/2016, rising to 11% in 2016/2017. In 2017/2018 there is going to be 3% difference between the two new tax bands, while in 2018/2019 and 2019/2020 there will be a 2% difference between the two and between 51-75g/km and 76-94g/km bands.

The changes will affect only those cars which emit very low CO2 levels. For example, the Volvo V60 Plug-in Hybrid with its 8% tax for this year will be taxed the same each year until April 2016, at which point its tax will rise to 10%.

Also announced was the fact that from now on the Government will be giving Benefit-in-Kind taxation figures at least three years in advance.

More Car Tax Advice and Information





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