Ad closing in a few seconds...

Budget 2013: company car tax changes

  • Changes to low-emission car taxation
  • Electric and plug-in hybrid cars affected
  • Planned fuel duty hike scrapped

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.

Secondly, 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. 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.

In terms of fuel, the 1.89 pence per litre hike planned for September 1 was scrapped.

The thresholds for the tax levels have changed too, and now the 20% basic rate tax is for those earning between £1 and £32,010 per year. Higher 40% tax is payable by those earning between £32,011 and £150,000 per year. Those lucky enough to be earning over £150,001 per year will still have to pay 50% as before.

The Basic Personal Allowance has also risen to £9,440.

Company car tax for the coming years now looks like this:

% of P11d  2012/13  2013/14  2014/15  2015/16  2016/17 
Price CO2 (g/km) CO2 (g/km) CO2 (g/km) CO2 (g/km) CO2 (g/km)
0 0 0 0 N/A N/A
5 1-75 1-75 1-75 0-50 N/A
6 N/A N/A N/A N/A N/A
7 N/A N/A N/A N/A 0-50
8 N/A N/A N/A N/A N/A
9 N/A N/A N/A 51-75 N/A
10 76-99 76-94 N/A N/A N/A
11 100-104 95-99 76-94 N/A 51-75
12 105-109 100-104 95-99 N/A N/A
13 110-114 105-109 100-104 76-94 N/A
14 115-119 110-114 105-109 95-99 N/A
15 120-124 115-119 110-114 100-104 76-94
16 125-129 120-124 115-119 105-109 95-99
17 130-134 125-129 120-124 110-114 100-104
18 135-139 130-134 125-129 115-119 105-109
19 140-144 135-139 130-134 120-124 110-114
20 145-149 140-144 135-139 125-129 115-119
21 150-154 145-149 140-144 130-134 120-124
22 155-159 150-154 145-149 135-139 125-129
23 160-164 155-159 150-154 140-144 130-134
24 165-169 160-164 155-159 145-149 135-139
25 170-174 165-169 160-164 150-154 140-144
26 175-179 170-174 165-169 155-159 145-149
27 180-184 175-179 170-174 160-164 150-154
28 185-189 180-184 175-179 165-169 155-159
29 190-194 185-189 180-184 170-174 160-164
30 195-199 190-194 185-189 175-179 165-169
31 200-204 195-199 190-194 180-184 170-174
32 205-209 200-204 195-199 185-189 175-179
33 210-214 205-209 200-204 190-194 180-184
34 215-219 210-214 205-209 195-199 185-189
35 220+ 215+ 210+ 200-204 190-194
36 N/A N/A N/A 205-209 195-199
37 N/A N/A N/A 210+ 200+

 

(The above table doesn't show the 3% diesel surcharge. For all cars using diesel, please add 3% onto the value you get from the table)