The government is consulting in order to seek views on the design of new ultra-low emission vehicle bands in the company car tax system. The consultation seeks to explore how best to incentivise the cleanest cars into the next decade, a period during which rapid innovation will deliver significant changes in the way motor vehicles are powered.
Responses are welcomed from a wide range of stakeholders including individuals, companies, and representative and professional bodies. In particular, a key issue is how to incentivise the uptake and development of step-change technologies over incremental improvements in existing technologies.
An ultra-low emission vehicle emits extremely low levels of carbon dioxide (CO2) compared to conventional vehicles fuelled by petrol or diesel. They typically also have much lower or virtually nil emissions of air pollutants and lower noise levels. Since 2009, the Office for Low Emission Vehicles has considered ULEVs as new cars that emit less than 75 grams of CO2 from the tailpipe per kilometre driven (gCO2/km), based on the current European type approval test, and are capable of at least 10 miles of zero emission driving.
Company car tax rates and bands, including for ULEVs are already legislated for until 2019-20. This consultation seeks views on the design of bands for ULEVs from 2020-21 onwards.
The consultation document can be found here.
The closing date for the consultation is 19 October 2016.
Comment
This consultation is to be welcomed with more and more employers specifying that employer provided cars are subject to CO2 emission level limits. Any degree of certainty about tax and Class 1A levels resulting from this consultation will help both employers and their employees with the decision making process.
