Company Car Tax Rates Set To Rise
The UK Government has confirmed company car tax, benefit-in-kind, rates up to 2019/20 to enable motorists to pick vehicles with affordable liabilities now, and in the future. That is important as executives tend to commit to multi year contracts. A key consideration is that some cars with fairly low liabilities in 2016/17 become far more expensive for 2019/20. Let us consider why.
Company car tax is based on a vehicle's P11D value that incorporates its list price, delivery, extras and registration plates. Let us say £20,000. Tax is then paid on a percentage of this sum, but which percentage is defined by the model's emissions.
Imagine it is a petrol vehicle that produces carbon at a rate of 105g/km. The 2016/17 figure is 18% which – based on the £20,000 P11D is £3,600. Tax is charged on the lower sum at the motorist's income tax rate of 20%, 40% or 45%. Let us assume it is the cheapest. 20% of the £3,600 is £720. However, the 18% rises to 25% for 2019/20 which equates to £1,000. Such rises are part of a wider plan to encourage drivers to pick increasingly eco-friendly models.
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Ten of the most popular company cars
Company Car Tax Rates: 2015/16, 2016/17, 2017/18, 2018/19 & 2019/20
| % of P11D | 2015/16 | 2016/17 | 2017/18 | 2018/19 | 2019/20 |
|---|---|---|---|---|---|
| CO2 (g/km) | CO2 (g/km) | CO2 (g/km) | CO2 (g/km) | CO2 (g/km) | |
| 0 | N/A | N/A | N/A | N/A | N/A |
| 5 | 0-50 | N/A | N/A | N/A | N/A |
| 7 | N/A | 0-50 | N/A | N/A | N/A |
| 9 | 51-75 | N/A | 0-50 | N/A | N/A |
| 10 | N/A | N/A | N/A | N/A | N/A |
| 11 | N/A | 51-75 | N/A | N/A | N/A |
| 12 | N/A | N/A | N/A | N/A | N/A |
| 13 | 76-94 | N/A | 51-75 | 0-50 | N/A |
| 14 | 95-99 | N/A | N/A | N/A | N/A |
| 15 | 100-104 | 76-94 | N/A | N/A | N/A |
| 16 | 105-109 | 95-99 | N/A | 51-75 | 0-50 |
| 17 | 110-114 | 100-104 | 76-94 | N/A | N/A |
| 18 | 115-119 | 105-109 | 95-99 | N/A | N/A |
| 19 | 120-124 | 110-114 | 100-104 | 76-94 | 51-75 |
| 20 | 125-129 | 115-119 | 105-109 | 95-99 | N/A |
| 21 | 130-134 | 120-124 | 110-114 | 100-104 | N/A |
| 22 | 135-139 | 125-129 | 115-119 | 105-109 | 76-94 |
| 23 | 140-144 | 130-134 | 120-124 | 110-114 | 95-99 |
| 24 | 145-149 | 135-139 | 125-129 | 115-119 | 100-104 |
| 25 | 150-154 | 140-144 | 130-134 | 120-124 | 105-109 |
| 26 | 155-159 | 145-149 | 135-139 | 125-129 | 110-114 |
| 27 | 160-164 | 150-154 | 140-144 | 130-134 | 115-119 |
| 28 | 165-169 | 155-159 | 145-149 | 135-139 | 120-124 |
| 29 | 170-174 | 160-164 | 150-154 | 140-144 | 125-129 |
| 30 | 175-179 | 165-169 | 155-159 | 145-149 | 130-134 |
| 31 | 180-184 | 170-174 | 160-164 | 150-154 | 135-139 |
| 32 | 185-189 | 175-179 | 165-169 | 155-159 | 140-144 |
| 33 | 190-194 | 180-184 | 170-174 | 160-164 | 145-149 |
| 34 | 195-199 | 185-189 | 175-179 | 165-169 | 150-154 |
| 35 | 200-204 | 190-194 | 180-184 | 170-174 | 155-159 |
| 36 | 205-209 | 195-199 | 185-189 | 175-179 | 160-164 |
| 37 | 210+ | 200+ | 190+ | 180+ | 165+ |
* Add 3% for diesels up to maximum 37% (2015/16).
* Scrapping of diesel supplement postponed to April 2021.
