Zero-emission vehicles to benefit from changes to company car tax

From today, drivers of clean cars will be eligible to pay no benefit-in-kind tax, in contrast to the current 16%

As of today, zero-emission vehicles are benefitting from changes to company car tax structures.

The modification will exempt electric vehicles (EVs) from the benefit-in-kind tax (BIK), allowing owners in the 20% tax bracket to save £1,023 BIK tax, while the change would provide savings of £2,046 for a 40% taxpayer for a small electric vehicle such as Renault Zoe.

The new tax rules also allow cars with carbon dioxide emissions of 1-50g/km to pay a reduced 12% BIK tax – determined by the electric drive range and the carbon emissions.

Tim Anderson, Head of Transport at Energy Saving Trust, added: “The imminent changes to the Benefit in Kind company car tax are an important step in supporting the increased uptake of EVs.

“The important saving brought by the reduction of 16% to zero tax in 2020/21 makes an EV increasingly attractive for company car drivers. Petrol and diesel cars contribute 18% to the UK’s total carbon emissions. EVs play a central role in the decarbonisation of transport and the improvement of air quality.”

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