Fleets have a critical role to play on the UK’s Road to Zero journey. The Chancellor has acknowledged this with a series of announcements designed to help our industry fulfil its potential in bringing the newest, cleanest vehicles onto the roads.
SPRING BUDGET HEADLINES
Company car tax rates confirmed until 2025
Most CCT rates will be reduced by 2% in 2020-21 for cars registered from 6th April 2020, returning to planned levels over the following two years before being frozen until 2024-25. Zero Emission Vehicle (ZEV) drivers will pay 0% in 2020/21, 1% in 2021/22 and 2% until 5th April 2025.
Plug-in Car Grant maintained… but changed
At midnight on 11th March 2020 the grant was extended to 2022/23, although it’s been reduced to £3,000. In addition, new cars costing £50,000 or more are no longer eligible for the grant and as a result, around 55% of new plug-in cars currently available continue to qualify for the grant at the revised amount – and the reduction should mean more grants for more drivers. Details of the calculation to determine vehicles’ eligibility for the revised Plug-in Car Grant can be found by clicking through the UK Government’s Website here.
‘Expensive car supplement’ removed for ZEVs
All ZEVs costing a VED list price of £40,000 or more will be exempt from the Vehicle Excise Duty (VED) supplement, saving early adopters £325 per year until 31st March 2025, when compared with other vehicle fuel types within the same price range. This applies to ZEVs registered from 1st April 2018, and is effective from 1st April 2020 to 31st March 2025. Note all vehicles with a VED list price of £40,000 or less (including ZEVs), are already exempt from the £325 supplement.
Capital allowances evolved based on emissions
From April 2021, the qualifying threshold for first year allowances will be reduced from 50g/km to 0g/km, and confirmed for ZEVs until 2025. The main rate (18%) threshold will be reduced from 110g/km to 50g/km, and a special rate of 6% will be introduced for vehicles with emissions greater than 50g/km.
Get in touch with your account manager today to understand how the Budget affects your fleet policy. To listen to Lex Autolease’s response to the Chancellor’s Budget announcement please email the consultancy team’s mailbox for the link to download the presentation.
While every effort has been made by Lex Autolease to ensure that the information given is not misleading, this material is provided only as an overview of the subject at the time of publication and is not a substitute for professional advice. No responsibility can be accepted by Lex Autolease for any loss or liability occasioned by any person acting or refraining from action as a result of this guide. Rates are subject to legislative approval.
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