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Company cars: ultra-low emissions vehicles (ULEVs)

ULEV - Ultra Low-Emissions VehicleCompany cars: ultra-low emissions vehicles

Newsletter issue – January 2017.

At Budget 2016, the government said it would consult over the Summer on changes to the ultra-low emission vehicles (ULEV) bands for taxing company cars to ‘focus incentives on the very cleanest cars’. As a result of the consultation, HMRC have now published details of eleven new bands, which will be introduced for ULEVs with emissions below 75g CO2/km from 2020/21, including a separate zero emission band.

Some of the lowest CO2 bands are based on the ‘electric range’ of the vehicle, as well as the CO2 emissions. This is the maximum distance the vehicles can travel in pure electric mode without recharging the battery or using the combustion engine of the plug-in vehicle. The aim is to distinguish between ULEV’s with different plug-in hybrid technologies and improved battery range, which will focus incentives on the very cleanest cars that allow most journeys to be zero emissions.

The seemingly complex provisions are included in Finance Bill 2016 and provide that, from 6 April 2020, the graduated table of company car tax bands will include a differential for cars with emissions of 1 to 50g CO2 per km based on the electric range of the car.

For cars with an electric range of 130 miles or more, the appropriate percentage will be 2%; for cars with an electric range of between 70 to 129 miles, the appropriate percentage will be 5%; for 40 to 69 miles, the appropriate percentage will be 8%; for 30 to 39 miles, the appropriate percentage will be 12%; and for less than 30 miles, the appropriate percentage will be 14%.

For cars that can only be driven in zero-emission mode, the appropriate percentage will be 2%.

ULEV - Ultra-Low Emissions Vehicles tax difference

For all other bands with CO2 emissions of 51g CO2 per km and above, the appropriate percentage will be based on the CO2 emissions only. For cars with emissions of 51 to 54g CO2 per km the appropriate percentage is 15%. For cars with emissions above 54g CO2 per km, the bands are graduated by 5g CO2 per km and the appropriate percentage increases by 1% for each 5g CO2 per km band. For example, 16% for 55 to 59, 17% for 60 to 64, up to a maximum of 37%. For cars with emissions above 90g CO2/km, the appropriate percentage will increase by 1% in comparison to 2019/20 levels.

 

 

Spurling Cannon Admin

Written by the Spurling Cannon Admin Team

If you would like to contact the Admin Team about this blog post or any other accounts related matter, please e-mail her on info@spurlingcannon.co.uk or phone the office on 01843 848383

Spurling Cannon Limited have made every effort to ensure accuracy at the time of publication. Information may be subject to legislative changes. Recipients should note that information may not reflect individual circumstances and should, therefore, not act on any information without seeking professional advice. We cannot accept any liability for actions taken or not taken as a result of the information given in this publication.

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