Are you thinking of getting a 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 be 1% of list price in 2021/2 and then 2% in 2022/3.
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%.
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 wait until 6 April 2020 as the P11d scale charge for electric cars is currently 16% of original list price for 2019/20.
ADVISORY FUEL RATE FOR COMPANY CARS
These are the suggested reimbursement rates for employees’ private mileage using their company car from 1 September 2019. Where there has been a change the previous rate is shown in brackets.
| Engine Size |
Petrol |
Diesel |
LPG |
| 1400cc or less |
12p |
|
8p |
| 1600cc or less |
|
10p |
|
| 1401cc to 2000cc |
14p (15p) |
|
10p
(9p) |
| 1601 to 2000cc |
|
11p (12p) |
|
| Over 2000cc |
21p
(22p) |
14p |
14p |
You can continue to use the previous rates for up to 1 month from the date the new rates apply. For hybrid cars use the equivalent petrol or diesel rate. However, for wholly electric cars there is a new 4p advisory rate from 1 September 2019.
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