[UK] Ultra-Low Emission Vehicles (ULEV) & Worldwide Harmonised Light Vehicle Test Procedure (WLTP)

We have previously reported changes to company car taxation in light of the government setting tax rates in line with the Worldwide Harmonised Light Vehicle Test Procedure (WLTP).  On the 17^th of October, HMRC produced a pdf document for developers that explains the planned legislative change that will bring this into effect (via the Finance Bill).

The document said that the changes will take effect from 2020/21 but the legislation will introduce a second table of company car tax rates.  There will be one set of tables for cars registered before the 6^th of April 2020 and one for cars registered on or after the 6^th of April 2020.  The banding structure will be identical to the current system but will have a different set of appropriate percentages based on the date the car was first registered.  The changes in the appropriate percentages reflect how the government is mitigating some of the impacts of adopting WLTP for ULEV cars.

One of the changes which we highlighted last week is the fact that for hybrid cars, employers will have to ascertain the number of “electric miles”.  This is the number of miles that a car can travel in electric mode before the car has to be recharged.  This only applies to ULEV cars with CO2 emissions of 50g g/km or less.

The Global Payroll Association has reproduced the pdf document on our website rather than replicate the information.  It is very important to watch the progress of the finance bill and recognise there will be 2 company car tax regimes from the new tax year.  One for cars registered before the 6^th of April and one for cars registered on or after this date 

Further, there is the administration task for employers to gather the “electric miles” data as this will impact the appropriate percentage to be applied.

We have previously reported changes to company car taxation in light of the government setting tax rates in line with the Worldwide Harmonised Light Vehicle Test Procedure (WLTP).  On the 17^th of October, HMRC produced a pdf document for developers that explains the planned legislative change that will bring this into effect (via the Finance Bill).

The document said that the changes will take effect from 2020/21 but the legislation will introduce a second table of company car tax rates.  There will be one set of tables for cars registered before the 6^th of April 2020 and one for cars registered on or after the 6^th of April 2020.  The banding structure will be identical to the current system but will have a different set of appropriate percentages based on the date the car was first registered.  The changes in the appropriate percentages reflect how the government is mitigating some of the impacts of adopting WLTP for ULEV cars.

One of the changes which we highlighted last week is the fact that for hybrid cars, employers will have to ascertain the number of “electric miles”.  This is the number of miles that a car can travel in electric mode before the car has to be recharged.  This only applies to ULEV cars with CO2 emissions of 50g g/km or less.

The Global Payroll Association has reproduced the pdf document on our website rather than replicate the information.  It is very important to watch the progress of the finance bill and recognise there will be 2 company car tax regimes from the new tax year.  One for cars registered before the 6^th of April and one for cars registered on or after this date 

Further, there is the administration task for employers to gather the “electric miles” data as this will impact the appropriate percentage to be applied.