New tax regime for company cars

The Government has launched a review of vehicles taxes linked to CO2 emissions. 

The CO2 emissions from all vehicles produced from September 2017 will be assessed using WLTP (Worldwide Harmonised Light Vehicle Test Procedure) .  WLTP is thought to be more accurate than the current system  NEDC (New European Driving Cycle) and  will identify which cars cause more pollution.   

Initial results indicate that CO2 levels are around 20% higher than those produced using NEDC and, as a result, there have been reports that income tax  and vehicle excise duty on company cars will increase by the same amount. Once the government has all the new emissions data, it will amend the company car tax rates so that overall there’s no major tax hikes.  

The changes will not take effect until 6th April 2020.  If you are considering buying company cars, remember to look at the WLTP results and not the NEDC.