Company Car Tax Bands 2018/2019
Company car tax has risen for those who drive a diesel car - unless their vehicle has passed the new RDE2 test.
What are the new emissions tests?
The new emissions test is called the World Harmonised Light Vehicle Test Procedure. For those who pay company car tax the crucial part of this new test is the RDE2 section within it. The RDE2 will test the amount of emissions released in real life driving situations. This differs from the previous NEDC emissions test, as during this test emissions were measured in the laboratory. The old testing method allowed manufacturers to create more favourable test conditions for their vehicle which resulted in a lower emissions rating than would be achieved in real life road conditions. The RDE2 test aims to wipe this kind of practice out.
The RDE2 test has been available since September 2017. At this time, new models and those which had undergone a major facelift were the only vehicles required to take the test. From the initial tests performed, it is expected that on average most cars will see a 22% rise in Co2 figures when moving from the NEDC test to the RDE2 test.
From September 2018, all new cars will need to undergo RDE2 testing. It will take some time to test every new car.
How does the new emissions test affect company car tax?
Company Car Tax ensures a tax is paid on a work benefit, it also incentivises the use of low emission cars as the tax you will pay is related to the amount of Co2 produced by the company car you drive.
From April 2018 the 3% surchase on diesel company cars has been raised to 4%. This new surcharge only applies to diesel cars that have not passed the RDE2 test. If your diesel company car has passed the RDE2 you will not be need to pay a surcharge at all.
The Company Car Tax rates for 2018/2019 can be seen in the table below;
Company Car Tax Bands 2018 - 2019
|Benefit in Kind 2018/2019 (%)||Benefit in Kind 2019/2020 (%)|
|Co2 emissions (g/km)||Petrol, electric and diesel vehicles with a RDE2 pass certificate||Diesel without RDE2 pass certificate||Petrol, electric and diesel vehicles with a RDE2 pass certificate||Diesel without RDE2 pass certificate|
|95 - 99||20||24||23||27|
|100 - 104||21||25||24||28|
|105 - 109||22||26||25||29|
|110 - 114||23||27||26||30|
|115 - 119||24||28||27||31|
|120 - 124||25||29||28||32|
|125 - 129||26||30||29||33|
|130 - 134||27||31||30||34|
|135 - 139||28||32||31||35|
|140 - 144||29||33||32||36|
|145 - 149||30||34||33||37|
|150 - 154||31||35||34||37|
|155 - 159||32||36||35||37|
|160 - 164||33||37||36||37|
|165 - 169||34||37||37||37|
|170 - 174||35||37||37||37|
|175 - 179||36||37||37||37|
What will the money raised be used for?
The money raised from the increase in the surcharge will be contributed to the Clean Air Fund. This fund is used to finance clean air initiatives such as; park and ride schemes, installing electric charging points, bus priority lanes and improving cycling infrastructure across the country.
What can I do to keep my company car payments low?
The tax on emission producing vehicles will continue to increase. As you can see from the table above in the 2019/2020 tax year, even zero emissions vehicles wll be subject to tax. To keep your company car payments low, you should choose a car with the lowest possible Co2 emissions, or an electric car if your company is offering this.
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