Following the backlash from the introduction of the Worldwide Harmonised Light Vehicle Testing Procedure (WLTP) the Government are making major changes to (“Benefit in Kind”) BIK for EVs and PHEVs.
The Government had already announced a number of plans to reduce the amount of BIK tax that company-car drivers would pay on EVs and PHEVs to 2%, but have now changed that to 0%. The change will come into play in April 2020 and all EVs will see the benefits, whether they’re registered before or after April 2020. In the tax year 2021/22 the BIK tax will go up to 1% and then to 3% in 2022/23.
With the recent opening of the Tesla Model 3 for orders and the prices currently coming in at under £390 a month, the timing is perfect! Other vehicles to benefit will be cars like the Nissan Leaf, Audi E-Tron, Volkswagen E-Golf, Kia E-Niro and Hyundai IONIQ.
Vehicles with CO2 emissions below 50g/km and electric range of 130 miles or more will also have a BIK tax reduction to 0%; but, it will only affect cars registered after April 2020. In the following tax years, the BIK will go up at the same rate as the EVs, meaning that it will be 1% in 2021/22 and 2% in 2022/23.
Here is a full view of the two tables, so that you know how BIK tax will change for company-car drivers over the next few years.
Cars registered before April 2020:
Cars registered after April 2020: