Bright Grahame Murray Money Matters Spring 19

2 Spring 2019 Double hit to company cars There is a steep 3% increase in company car tax rates from 6 April. Percentage charges for the current year and for 2019/20 are: The maximum percentage charge is capped at 37%. For diesel cars, a 4% surcharge is added when calculating the percentage tax charge, subject to the 37% maximum. Measuring CO 2 emissions There has also been much uncertainty about changes to the way cars’ CO 2 emissions will be measured. CO 2 emission figures for company cars will be based on the new worldwide harmonised light vehicle test procedure (WLTP) from April 2020. Until then, cars undergoing the new test will be given a CO 2 emission figure correlated to the old basis of measurement. The change could push up a car’s CO 2 emissions by several percentage points, but the government will not be reviewing the impact until this spring. The correlated figures are, however, resulting in higher percentages than the previous basis, and this disparity will worsen once true WLTP emission figures are used. Ultra-low emission vehicles If you are planning to change your company car and want to keep the tax cost to a minimum, then look ahead to the new ultra-low emission regime coming in for 2020/21. From 6 April 2020, the percentage charge will be just 2% for a car with zero emissions, or for a plug-in electric vehicle with CO 2 emissions of 1–50g/km and with an electric range of 130 miles or more. The percentage increases as the electric range reduces. The electric range is the maximum distance that can be travelled in pure electric mode without recharging the car’s battery or using the combustion engine of the plug-in vehicle. Increasing tax costs make vehicle selection even more important. If you would like to discuss how you might be affected, please get in touch. CO 2 emission figures for company cars will be based on the new worldwide harmonised light vehicle test procedure (WLTP) from April 2020. CO 2 g/km 0-50 51- 75 76- 94 95 and above 2018/19 13% 16% 19% 20% + 1% per 5g/km over 95g/km 2019/20 16% 19% 22% 23% + 1% per 5g/km over 95g/km Credit: iStock/Petmal