In the Autumn Budget 2017, the government announced that cars registered from April 2020 will be taxed based on Worldwide harmonised Light vehicles Test Procedure (WLTP) figures. WLTP aims to be more representative of real world driving conditions, compared to the previous test known as the New European Driving Cycle (NEDC). As a result, reported emissions are expected to increase which could impact Vehicle Excise Duty and company car tax.
The Government’s aim to reduce pollution and improve air quality in the UK and encourage people to invest in more environmentally friendly vehicles, and it has brought about a revision of the Appropriate Percentages used in the Benefit In Kind (BIK) calculations, particularly for Ultra Low Emission Vehicles (ULEVs).
HMRC has confirmed that from April 2020 there will be 11 new bands for ULEVs as well as the inclusion of a separate zero emissions band for wholly electrically powered vehicles. Company car drivers using zero emission cars will pay no company car tax in 2020-2021 with the tax rate increasing by one percent each tax year before returning to the planned two percent in 2022-2023 and on.
The P11D Organiser has all the lookup tables built in, which means that having the registration date of the car is very important. Please note that it is the registration data of the vehicle that affects the calculation, not when it was allocated to an employee.