The long-awaited results of the Government’s WLTP review bring an announced freeze on company car tax for fleet cars and the introduction of a zero Benefit-in-Kind (BiK) rate for fully electric cars.

Vehicles registered before 6 April 2020 will see their company car tax bands frozen at the 2020/21 rates until 2022/23
A new, more accurate testing procedure, WLTP will take over from the existing NEDC Correlated CO2 figures in April 2020. This change is expected to increase most cars’ reported CO2 figures by 10-20%, having an inflationary impact on emissions-based CO2 taxes like CCT and VED.
The changes mean that those drivers with vehicles registered before 6 April 2020 will see their company car tax bands frozen at the 2020/21 rates up to and including 2022/23.
Meanwhile drivers of company cars registered after 6 April 2020 – all of which will have been tested on the more stringent WLTP cycle – actually get a 2% tax cut on the former 2020/21 rates from 1g/km upwards, with the maximum 37% BiK now not kicking in until 170g/km. These figures then increase by 1% in both the 2021/22 and 2022/23 tax years, from when the 37% BiK threshold returns to 170g/km.
It will also see zero-emission company cars paying no tax. All zero-emission company cars will attract a reduced appropriate percentage of 0% in 2020/21, 1% in 2021/22, before returning to the planned 2% rate in 2022-23.
Cars first registered from 6 April 2020 | ||||
CO2 emissions (g/km) | Electric range (miles) | Appropriate Percentage (%) | ||
2020-21 | 2021-22 | 2022-23 | ||
0 | N/A | 0 | 1 | 2 |
1-50 | > 130 | 0 | 1 | 2 |
1-50 | 70-129 | 3 | 4 | 5 |
1-50 | 40-69 | 6 | 7 | 8 |
1-50 | 30-39 | 10 | 11 | 12 |
1-50 | < 30 | 12 | 13 | 14 |
51-54 | 13 | 14 | 15 | |
55-59 | 14 | 15 | 16 | |
60-64 | 15 | 16 | 17 | |
65-69 | 16 | 17 | 18 | |
70-74 | 17 | 18 | 19 | |
75-79 | 18 | 19 | 20 | |
80-84 | 19 | 20 | 21 | |
85-89 | 20 | 21 | 22 | |
90-94 | 21 | 22 | 23 | |
95-99 | 22 | 23 | 24 | |
100-104 | 23 | 24 | 25 | |
105-109 | 24 | 25 | 26 | |
110-114 | 25 | 26 | 27 | |
115-119 | 26 | 27 | 28 | |
120-124 | 27 | 28 | 29 | |
125-129 | 28 | 29 | 30 | |
130-134 | 29 | 30 | 31 | |
135-139 | 30 | 31 | 32 | |
140-144 | 31 | 32 | 33 | |
145-149 | 32 | 33 | 34 | |
150-154 | 33 | 34 | 35 | |
155-159 | 34 | 35 | 36 | |
160-164 | 35 | 36 | 37 | |
165-169 | 36 | 37 | 37 | |
170+ | 37 | 37 | 37 |
Cars first registered before 6 April 2020 | ||||
CO2 emissions (g/km) | Electric range (miles) | Appropriate Percentage (%) | ||
2020-21 | 2021-22 | 2022-23 | ||
0 | N/A | 0 | 1 | 2 |
1-50 | > 130 | 2 | 2 | 2 |
1-50 | 70-129 | 5 | 5 | 5 |
1-50 | 40-69 | 8 | 8 | 8 |
1-50 | 30-39 | 12 | 12 | 12 |
1-50 | < 30 | 14 | 14 | 14 |
51-54 | 15 | 15 | 15 | |
55-59 | 16 | 16 | 16 | |
60-64 | 17 | 17 | 17 | |
65-69 | 18 | 18 | 18 | |
70-74 | 19 | 19 | 19 | |
75-79 | 20 | 20 | 20 | |
80-84 | 21 | 21 | 21 | |
85-89 | 22 | 22 | 22 | |
90-94 | 23 | 23 | 23 | |
95-99 | 24 | 24 | 24 | |
100-104 | 25 | 25 | 25 | |
105-109 | 26 | 26 | 26 | |
110-114 | 27 | 27 | 27 | |
115-119 | 28 | 28 | 28 | |
120-124 | 29 | 29 | 29 | |
125-129 | 30 | 30 | 30 | |
130-134 | 31 | 31 | 31 | |
135-139 | 32 | 32 | 32 | |
140-144 | 33 | 33 | 33 | |
145-149 | 34 | 34 | 34 | |
150-154 | 35 | 35 | 35 | |
155-159 | 36 | 36 | 36 | |
160 and over | 37 | 37 | 37 |
Real Driving Emissions (RDE)
Few fleets would have been aware of the RDE test before last year’s Budget made it a core component of diesel taxation. This is an on-road test, using portable equipment to measure and compare harmful emissions to the laboratory-derived results, and there is a tightening ‘conformity factor’ requiring those two figures to gradually align.
RDE1 allows vehicles to emit 2.1 times more pollutants on the road, and becomes mandatory for all new cars from 1 September 2019. From 1 January 2020, newly-homologated cars move to RDE2, with a limit of 1.5 times more pollutants on the road, and this applies to all new cars one year later. RDE2 compliant diesels will be exempt from the 4% Benefit-in-Kind surcharge.
Euro 6c, 6d TEMP, and 6d
Fleets will already be familiar with the ‘Euro’ emissions standards, introduced in 1992. But Euro 6 – notable for almost closing the gap between diesel and petrol NOx emissions – isn’t a one-stage process, and it is also linked to the roll-out of WLTP and RDE. Light commercial vehicle deadlines are 12 months later than those for passenger cars, outlined below:
Phase | Test cycle | RDE | Type approvals from | New car sales from |
Euro 6b | NEDC | N/A | September 2014 | September 2015 |
Euro 6c | WLTP | N/A | September 2017 | September 2018 |
Euro 6d TEMP | WLTP | RDE1 | September 2017 | September 2019 |
Euro 6d | WLTP | RDE2 | January 2020 | January 2021 |
Diesel surcharges for non-RDE2 diesel cars
From April 2018, the Company Car Tax diesel supplement went up by 1%, increasing to 4% for cars not meeting the RDE2 standard. Vehicles that do adhere to the standard have the supplement removed altogether.
For VED, the levy saw the first-year VED rate for non-RDE2 tested diesel cars go up by one band from April 2018, adding as much as £500 for higher-emission vehicles.