The government has announced that all zero emission company cars will not be required to pay benefit-in-kind (BIK) tax for 2020/21.
All zero emission company cars will pay zero BIK tax in 2020/21, 1% in 2021/22, before returning to the planned 2% rate in 2022/23. The tax reductions will also be extended to vehicles registered prior to 6 April
HM Treasury published its decision following its review of the Worldwide Harmonised Light Vehicle Test Procedure (WLTP) emissions regulations last year.
“The introduction of WLTP provides an opportunity to strengthen the link between the vehicle tax system and the true environmental impact of car purchasing decisions, allowing consumers to make more informed decisions between model variations,” read the review.
A statement from the government read: “The vehicle tax system plays an important role in supporting our ambition for all new cars sold to be effectively zero emission by 2040 and to help achieve our legally binding climate change objectives.
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