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The new system of Company Car Tax, explained

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It’s been a long time coming. Back in March, George Osborne announced that, instead of revealing the rates of Company Car Tax for 2020-21 as he usually would, he’d instead put the entire system up for review. This review began under his successor as Chancellor, Philip Hammond, with the launch of a consultation back in August. This consultation then closed in October. And then we got the actual outcome in the Autumn Statement – except the Autumn Statement didn’t quite contain all of the details.

Those details were, in fact, featured in the draft version of the Finance Bill for 2017 that was published earlier in December. We can now definitely and unequivocally present the new Company Car Tax rates for 2020-21, as per our table:

WHAT ARE THE KEY CHANGES TO COMPANY CAR TAX?

The most important change is that, as of April 2020, there will be new CCT bands specifically for ultra-low emission cars – defined as those cars with CO2 emissions of less than 75g/km.

Zero-emission cars will face a 2% rate, down from 7% this year. The rates for cars with CO2 emissions between 1 and 50g/km will be based on the number of zero-emission miles they are capable of, from 2% for those that can go 130 miles or more without emissions to 14% for those that can only manage less than 30 miles. Whilst the rates for cars emitting more than 90 gCO2/km will rise by 1 percentage point, up to the maximum of 37% for the most polluting cars.

There shall be more on this, and the Autumn Statement’s other policies, in our forthcoming White Paper – but we thought that we’d tabulate the numbers before then. After all, the sooner that fleet managers are aware of the rates, the sooner they can start planning.

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