Guide to company car tax - April 2020 SEAT FOR BUSINESS
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SEAT FOR BUSINESS Guide to company car tax April 2020
April 2020 Vehicle excise duty
Vehicle excise duty
(VED)
Introduction
The past few years have been a difficult time for fleet managers, Diesel cars that do not meet the Real Driving Emissions Step 2 (RDE2)
The Vehicle Excise Duty system for new car registrations is summarised First year rate table
with the uncertainty surrounding Benefit in Kind (BIK) rates and the standard are moved up one CO2 emissions band in the vehicle excise
below and shown in the table (right). Diesel cars that do not meet the
changes to WLTP emission figures. In the March budget the BIK rates duty table.
Real Driving Emissions Step 2 (RDE2) standard are subject to increased Petrol Diesel
were confirmed for the next five years. The rates will increase by 1% in WLTP CO2
The fuel benefit charge first-year rates.
emissions
and RDE2 cars not Alternative
2021/22, 1% in 2022/23 and then frozen at these rates for 2 years. Now Compliant meeting fuel cars
The Government fuel benefit charge (FBC) used to calculate the tax First Year Rate is applied to all new cars, when they are first (g/km)
that the WLTP figures have been announced Fleet managers and Diesel cars RDE2
drivers will have a clearer picture over the coming years. due on employer-provided fuel for private use is set at £24,500 in registered. The First Year Rate is based on the fuel type and the CO2
0 £0 £0 £0
2020/21 tax year. emissions figure.
Vehicle Excise Duty has been put up, with the increases growing as 1-50 £10 £25 £0
emission figures increase. Zero emission vehicles will no longer be Fuel duty Standard Rate is payable from the second year and priced at £150. 51-75 £25 £110 £15
subject to the VED surcharge for vehicles costing over £40,000. Road fuel duty rates remained unchanged in 2020/21 tax year. Alternative fuelled vehicles receive a £10 reduction and Electric
76-90 £110 £135 £100
vehicles are exempt.
The changes in the emissions testing combined with the changes to 91-100 £135 £155 £125
Class 1A NIC
the company car tax, VED rates and introduction of various clean air Additional Rate is applied to all vehicles excluding zero emissions 101-110 £155 £175 £145
zones around the country mean that just rolling from one iteration The percentage used for calculating Class 1A NIC on company cars with a list price over £40,000 including options. It is an additional £325 111-130 £175 £215 £165
of a car into the next as the contract renews is likely to bring some and fuel in 2020/21 remains at 13.8%. per year and is payable from the second year for the next five years. 131-150 £215 £540 £205
heavy cost increases. It will really pay to take the time to examine
Ultra-low emissions vehicles 151-170 £540 £870 £530
the total cost of ownership of your vehicles and your fleet. Visit our
total cost of ownership calculator https://www.seat.co.uk/fleet- Cars with CO2 emissions of less than 50g/km, a zero-emissions range 171-190 £870 £1,305 £860
cars/business/fleet-managers/total-cost-of-ownership. of at least 70 miles and cost less than £50,000 benefit from a Plug-in 191-225 £1,305 £1,850 £1,295
html to see more. SEAT have already introduced the Mii electric this Car Grant of 35% of their price, up to a maximum of £3,000. 226-255 £1,850 £2,175 £1,840
year, and the new Leon is being launched with hybrid and mild hybrid In 2020/21 tax year the Benefit-in-Kind rate for zero-emissions cars is Over 255 £2,175 £2,175 £2,165
powertrains in both hatchback and estate body styles. 0%. It then increases to 1% in 2021/22 tax year and 2% in 2022/23 tax Alternative fuel vehicles include hybrids, bioethanol and liquid petroleum gas.
Company car tax bands year. The rates will then be frozen at the 2022/23 rates for 2023/24
and 2024/25.
The government has announced two Benefit-in-Kind tax tables to run Standard rate table
side-by-side from 2020/21 tax year: one for cars registered before For cars with CO2 emissions from 1-50g/km, their BiK rate will be
6 April 2020 using NEDC CO2 emissions figures, the other for cars determined by their range in zero-emissions mode. Fuel type Payment
registered from 6 April 2020 and using WLTP CO2 figures. Diesel cars
Petrol or diesel £150
that do not meet the Real Driving Emissions Step 2 (RDE2) standard
remain subject to the 4% diesel surcharge. Electric £0
Alternative £140Company Car Tax Cars registered before 6 April 2020 Cars registered from 6 April 2020
Capital allowances
(CCT) CO2 g/km
Zero emissions
range (miles)
2020-21
(%)
2021-22
(%)
2022-25
(%)
CO2 g/km
Zero emissions
range (miles)
2020-21
(%)
2021-22
(%)
2022-25
(%)
0 N/A 0 1 2 0 N/A 0 1 2
Company Car Tax (CCT) is more commonly known as Benefit-in-Kind 1-50 >130 2 2 2 1-50 >130 0 1 2 A car’s initial cost, or capital cost, can be offset against
(BiK) tax. To calculate your BiK you need to know the P11D value of the 1-50 70-129 5 5 5 1-50 70-129 3 4 5 corporation tax by a business using capital allowance rules
car at first registration, its fuel type and its CO2 emissions figure. If it is 1-50 40-69 8 8 8 1-50 40-69 6 7 8 based on the car’s emissions of CO2. A 100% first year capital
a hybrid you will also need to know its range in zero emissions mode. allowance – meaning all the capital cost can be offset against
1-50 30-39 12 12 12 1-50 30-39 10 11 12
In July 2019 the government announced that from 2020/21 tax 1-50Class 1A NIC Fuel allowances Ultra-low emissions
vehicles (ULEVs)
Class 1A National Insurance Contributions (NIC) are payable by Employer-provided ‘free’ fuel Choosing an ultra-low emissions vehicle – or ULEV – as a
employers on company cars and car fuel at the rate of 13.8%. Example: calculating tax due on ‘free’ fuel company car offers drivers BiK tax benefits. The government
Unless you reimburse your employer for the cost of fuel used offers grants to support the wider use of electric and hybrid
for your private mileage in a company car, you will pay tax on A new SEAT Ateca SE Technology 1.0 TSI Ecomotive 115PS
has combined fuel consumption of 41.5mpg and CO2 vehicles via the Office of Low Emission Vehicles (OLEV) to offset
Example: how to calculate employers’ Class 1A NIC it. You can calculate the tax you’ll pay by using the Government
emissions of 154g/km. If my employer pays for my fuel for the initial cost.
fuel benefit charge (FBC) – £24,500 in 2020/21 tax year. You’ll
A SEAT Ateca SE Technology 1.0 TSI Ecomotive 115PS with private use, how much tax will I pay on it?
also need your car’s combined fuel consumption figure and BiK Cars
a P11D value of £24,570 has CO2 emissions of 154g/km.
tax percentage – see example, right. CO2 and fuel consumption The CO2 emissions figure of 154g/km for this model
This corresponds to 33% Benefit-in-Kind rate which gives a For cars that have CO2 emissions of less than 50g/km, can
data for all SEAT models is available at www.seat.co.uk or the gives it a BiK tax percentage of 33%. Multiplying this by the
taxable benefit of £24,570 x 33% = £8,108. When multiplied travel at least 70 miles without any emissions at all and cost
Vehicle Certification Agency at www.dft.gov.uk/vca. Government fuel benefit charge of £24,500 gives a taxable
by 13.8%, the annual Class 1A NIC due on the car is £1,118.90. less than £50,000. The grant will pay for 35% of the purchase
Using your own car for business mileage value of £8,085. Multiplying again by your marginal tax rate price for these vehicles, up to a maximum of £3,000.
For annual Class 1A NIC on fuel, figures for the car’s tax (20% or 40%) gives annual tax payable of £1,617 for a 20%
percentage and the Government fuel benefit charge If you use your own car for business mileage, you can claim taxpayer, or £3,234 for a 40% taxpayer. Electric Vehicle Homecharge Scheme
(FBC) – £24,500 in 2020/21 tax year – are used. an allowance from your employer based on the HMRC’s
Approved Mileage Allowance Payments (AMAP) system – You then need to work out the cost of the private mileage The Electric Vehicle Homecharge Scheme (EVHS) provides
Multiply the FBC by the tax percentage and then by 13.8% you cover in a year. Assuming the national average price for grant funding of up to 75% towards the cost of installing electric
the tax and national insurance-exempt rates agreed by HMRC,
to calculate the annual NIC due. For the Ateca example diesel of £5.82/gallon (£1.28/litre), £1,617 will buy around 278 vehicle smart charge points at domestic properties across
shown below:
above, that works out at £24,500 x 33% x 13.8% = £1,115.73. gallons for a 20% taxpayer. For a 40% taxpayer £3,234 will the UK. The grant is a 75% contribution towards the cost of
buy 556 gallons. Multiplying the Ateca’s 41.5mpg combined one charge point and its installation up to a maximum of £350
HMRC AMAP rates 2020/21 fuel consumption by 278 gallons gives 11,537 – the private (including VAT) per household/eligible vehicle.
mileage you will need to cover to make the ‘free’ fuel benefit
Up to 10,000 miles Over 10,000 miles
worthwhile. For a 40% taxpayer the figure is 23,074 miles. Workplace Charging Scheme
All cars 45p/mile 25p/mile The Workplace Charging Scheme (WCS) is a voucher-based
If you cover fewer private miles than the calculated
figure, paying for the fuel yourself will cost less than the tax. scheme that provides support towards the up-front costs of the
Mileage reimbursement from your employer at a higher If your private mileage is greater than the calculated figure, purchase and installation of electric vehicle charge points, for
rate than the above figures will incur tax, whereas you are better off paying the tax. eligible businesses, charities and public sector organisations.
reimbursement made at a lower rate entitles you to claim The contribution is limited to 75% of purchase and installation
tax relief on the difference. costs, up to a maximum of £350 for each socket, up to a
maximum of 40 across all sites.SEAT FOR BUSINESS Official fuel consumption for the SEAT range (excluding Mii electric) mpg (litres/100km) combined: 29.7(9.5) – 61.4(4.6). Combined CO 2 emissions 207 - 121 (g/km). Figures shown are for comparability purposes; only compare fuel consumption and CO 2 figures with other vehicles tested to the same technical procedures. These figures may not reflect real life driving results, which will depend upon a number of factors including the accessories fitted (post-registration), variations in weather, driving styles and vehicle load. The SEAT Mii electric has a range of 161 miles combined city and motorway driving. Combined CO 2 emissions 0 (g/km). The SEAT Mii electric figures were obtained after the battery had been fully charged. The Mii Electric is a battery electric vehicle requiring mains electricity for charging. Figures shown are for comparability purposes. Only compare fuel consumption, CO 2 and electric range figures with other vehicles tested to the same technical procedures. These figures may not reflect real life driving results, which will depend upon a number of factors including the starting charge of the battery, accessories fitted (post registration), variations in weather, driving styles and vehicle load. Zero emissions while driving. TERMS AND CONDITIONS The explanations and data set out in this guide are for general information only, and though given in good faith, are made without any warranty as to their accuracy and do not take into account changes after the date of publication, March 2020. Please refer to your legal or tax adviser for individual professional advice. Images are for illustration purposes only and may not be to the exact specification described. All information correct at date of publication, March 2020. All prices shown are applicable to vehicles in standard trim, are correct at date of publication and include VAT at 20%. All models listed are equipped with standard-fit transmission unless otherwise stated. All SEAT diesel engines are fitted with a Diesel Particulate Filter (DPF) as standard. CO 2 emissions can change if a different-sized alloy wheel is ordered with the vehicle and may also lead to a change to VED and BIK tax liabilities.
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