Pay No Company Car Tax On Electric Cars in 2020/21

by Steph Carty 3 months ago

If you’re looking to upgrade your company car there never has been a better time to switch to an electric vehicle, find out why in our latest blog…


The Government have recently stated that company car drivers who choose to drive an electric car will pay no Benefit-In-Kind (BIK) tax in 2020/21. HM Treasury say that for cars registered from 6th April 2020, most company car tax rates will reduce by 2% meaning that for a 100% electric vehicle with zero emissions, this will drop to 0%, therefore company car drivers will pay no BIK tax at all.

These rates are also applicable to already existing company car drivers who already drive 100% electric vehicles which were registered prior to 6th April 2020. So, for those drivers who were looking forward to a reduced rate of 2%, they can now enjoy 0% tax in 2020/21. The 0% BIK tax also applies to company cars registered from 6th April 2020 with emissions from 1-50g/km and with a 100% electric range of 130 miles or more. In 2021/22 both fully electric cars with zero emissions and emissions from 1-50g/km will rise to 1% followed by an increase to 2% BIK tax in 2022/23 (please see both tables below for a more detailed breakdown).

* Add 4% for diesels 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

* Add 4% for diesels 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. Both table from Fleet News.

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