Time for an electric company car?
The government has announced that there will be a zero P11d benefit for the drivers of electric cars from 2020/21. This is instead of the 2% scale charge that was originally included in Finance Act 2017 to apply for 2020/21.
The legislation for the change will be included in Finance Bill 2020 and it is proposed that the benefit will increase to 1% of list price in 2021/22 and then 2% in 2022/23.
The zero taxable benefit will also apply to hybrid cars emitting no more than 50 grams of CO² per kilometre with a range using its electric motor of at least 130 miles, but only for cars first registered on or after 6 April 2020. For those registered before 6 April 2020 the scale charge will be 2% for 2020/21 to 2022/23.
Rather confusingly there will be two different sets of scale charges from 2020/21, one set relating to those registered before 6 April 2020 and a new lower set of rates for those registered on or after 6 April 2020.
However businesses are advised to consider waiting until 6 April 2020 before providing an electric company car as the P11D scale charge for electric cars is currently 16% of original list price for 2019/20.
For further information on the P11D benefits of an electric company car, please contact Alan Rolfe on 023 8046 1235.