Negative BIK equals Positive news for EV company car drivers

BIK

BIK 2020 onwards

Tags: , , , , , , , , ,

Company car drivers choosing a pure electric vehicle will pay no benefit-in-kind (BIK) tax in 2020/21 but with infrastructure still in its infancy, is now the right time to move your business into Electric Vehicles?

News that HM Treasury has scrapped previously published BIK rates for 2020/21 has given EV company car drivers some very positive news. They have replaced the previous BIK rates with two new BIK tables for company car drivers; a table for those driving a company car registered after April 6, 2020, and one for those driving a company car registered before April 6, 2020 (see tables below).

HM Treasury says that for cars first registered from April 6, 2020, most company car tax rates will be reduced by two percentage points.

That means for a pure electric vehicle with zero tailpipe emissions, company car drivers will be taxed at 0%, paying no BIK tax at all!

Furthermore, the zero percent rate is also extended to company car drivers in pure electric vehicles registered prior to April 6, 2020, who were already looking forward to a much-reduced rate of 2% for 2020/21.

The 0% rate will also apply to company cars registered from April 6, 2020, with emissions from 1-50g/km and a pure electric mile range of 130 miles or more.

Both will then increase to 1% in 2021/22 and 2% in 2022/23.

Pure electric company cars registered before April 6, 2020, will also increase to 1% and 2% in subsequent years, 2021/22 and 2022/23.

However, company cars registered before April 6, 2020, with emissions from 1-50g/km and a pure electric mile range of 130 miles or more attract a 2% BIK rate in 2020/21 and stay the same for the two subsequent tax years.

From 2023/24, fleets will have one BIK tax table again as the rates are realigned.

The 4% diesel premium on published BIK rates remains, but cars classed as RDE2 will still be exempt from the charge.

Company car tax for cars registered before April 6 2020

CO2 (g/km)

Electric range (miles)

2020-21(%)

2021-22(%)

2022-23(%)

0

N/A

0

1

2

1-50

>130

2

2

2

1-50

70-129

5

5

5

1-50

40-69

8

8

8

1-50

30-39

12

12

12

1-50

<30

14

14

14

51-54

15

15

15

55-59

16

16

16

60-64

17

17

17

65-69

18

18

18

70-74

19

19

19

75-79

20

20

20

80-84

21

21

21

85-89

22

22

22

90-94

23

23

23

95-99

24

24

24

100-104

25

25

25

105-109

26

26

26

110-114

27

27

27

115-119

28

28

28

120-124

29

29

29

125-129

30

30

30

130-134

31

31

31

135-139

32

32

32

140-144

33

33

33

145-149

34

34

34

150-154

35

35

35

155-159

36

36

36

160+

37

37

37

* Add 4% for diesel cars up to a maximum of 37% (unless the car is RDE2 compliant). Diesel plug-in hybrids are classed as alternative fuel vehicles, so the 4% diesel supplement does not apply to these vehicles irrespective of RDE2 compliance

Company car tax for cars registered from April 6 2020

CO2 (g/km)

Electric range (miles)

2020-21(%)

2021-22(%)

2022-23(%)

0

N/A

0

1

2

1-50

>130

0

2

2

1-50

70-129

3

4

5

1-50

40-69

6

7

8

1-50

30-39

10

11

12

1-50

<30

12

13

14

51-54

13

14

15

55-59

14

15

16

60-64

15

16

17

65-69

16

17

18

70-74

17

18

19

75-79

18

19

20

80-84

19

20

21

85-89

20

21

22

90-94

21

22

23

95-99

22

23

24

100-104

23

24

25

105-109

24

25

26

110-114

25

26

27

115-119

26

27

28

120-124

27

28

29

125-129

28

29

30

130-134

29

30

31

135-139

30

31

32

140-144

31

32

33

145-149

32

33

34

150-154

33

34

35

155-159

34

35

36

160-164

35

36

37

165-169

36

37

37

170+

37

37

37

* Add 4% for diesel cars up to a maximum of 37% (unless RDE2 compliant). Diesel plug-in hybrids are classed as alternative fuel vehicles, so the 4% diesel supplement does not apply to these vehicles irrespective of RDE2 compliance

Get in touch and let’s start a conversation

If you would require further advice from your account manager please use the form below 

Your Name


Company Name

Your Email

Telephone number

How did you hear about us?

How can we help?

0115 946 6466

Leave a Reply