Home Science 2020 car tax changes could see a rise in the number of company cars on UK...

2020 car tax changes could see a rise in the number of company cars on UK roads 

xperts say the government’s new proposals for 2020/21 tax year, which will scrap benefit-in-kind payments, will make company cars more appealing to motorists. This could be boosted further due to a rising number of fully-electric and hybrid vehicles entering the market.

Steve Beattie, head of business sales at Volvo Car UK said: “With the changes in legislation in company car tax for both BEVs and PHEVs, I think we will see a swing where fleet customers will be opting back in.

“If you look at an XC40 PHEV, from April that will be £160 a month in BIK for a 40% taxpayer and that is fully inclusive.

“You are not going to get a personal lease for that sort of car at that price with everything included. A lot of cars like that are more like £400 a month.”

Volvo is hoping to draw in customers by offering a year’s free electricity to charge their vehicle as an extra incentive for company car owners.

READ MORE: Electric cars actual ranges are lower than estimates

Electric cars will become exempt from company car taxes (Image: Getty)

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From 6 April company car owners will no longer pay benefit-in-kind on fully-electric vehicles in a massive win for motorists.

This figure compares to 37 percent for vehicle with a high emissions rate which means monthly repayments for EV cars will be slashed.

Premium electric vehicles could be up to £1,000 per month cheaper than a traditional vehicle under the new proposal.

According to the RAC, new tax rules could see a swing back towards company cars as many employees now opt for cash alternatives instead.

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The breakdown group the RAC, the decision to remove the tax was also a move to support the shift away from high emissions vehicles towards electric technology.

Speaking to The Times, Elaine Clark from Cheapaccounting said: The catch is you do need the cash to buy the car.

“But the tax reliefs and benefit-in-kind savings make it a free-car bonus . . . I expect I will look at this for my own car in the not too distant future.”

All fully-electric car owners with vehicles under £40,000 are exempt from paying any car tax charges as long as they emit zero-carbon emissions.

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Electric car owners do not need to pay city congestion charge such as London’s Ultra Low Emissions Zone (ULEZ).

Charging an electric vehicle is also cheaper than paying for traditional fuel which has steadily increased since Christmas.

Some models claim they can travel up to 390 miles on a single charge which can take just 30 to 40 minutes if a rapid charger is used.

Analysis from Elmtronics showed motorist can save over £1,100 over three years by purchasing BMW’s popular i3 over their 3 Series.

The group also found over £800 could be saved by purchasing a Nissan LEAF model rather than a petrol pumping Nissan Juke.

Speaking to Express.co.uk, CEO of Elmtronics Dan Martin said: “Zero emissions cars with a value of £39,999 or less are exempt from paying road tax which means that you will save at least £145 per year at the standard rate.

“If you’re considering making the switch, make sure you factor in the tax savings – there are online calculators available to make the comparison as simple as possible from organisations such as Go Ultra Low.”

However, motorists must declare their car to the DVLA even if they think their car is exempt from charges.

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Your car must be road taxed at all times and cars which do not pay charges will still need to be placed on the register.

Motorists who presume their car is exempt and do not inform officials could see their car clamped or seized by enforcement teams.

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