If you’re an employee who drives a company car and opts for an emissions-free electric fleet car, you will pay no benefit in kind tax for the year confirms the Treasury.
This ties in with the Governments plans to drastically reduce emissions by 2050. According to The Committee On Climate Change;
Meeting future carbon budgets and the UK’s 2050 target to reduce emissions by at least 100% of 1990 levels will require reducing domestic emissions by at least 3% of 2018 emissions, that is 50% higher than under the UK’s previous 2050 target and 30% higher than achieved on average since 1990. This is an indication of how substantial the step up in action must be to cut emissions in every sector.
Those who choose electric only models will pay 0% company car tax for the year from April 2020. From 2021, the benefit will be calculated at 1% of company car value and 2% from April 2022.
Plug-in hybrid cars will also qualify for 0% BIK if they emit less than 50 grams per kilometre of CO2 and are able to travel for at least 130 miles as a pure electric vehicle.
Plug-in hybrids with an official electric range of less than 30 miles will be subject to 12% BIK from April 2020, which is still less than a car powered by a combustion engine.
This is all great news in theory, because as we are all aware, the country is nowhere near prepared for sustaining these vehicles – charging points are few and far between, so how many people will really benefit is yet to be seen.