WLTP increases company car tax in UK from today
The company car and road tax of new vehicles registered from today (1 April 2020) in the UK will increase significantly due to the adoption of WLTP CO2 emissions figures.
Previously CO2 emissions from the NEDC test were used to calculate the taxes.
Research by cap hpi has found that the average diesel, petrol or hybrid car will see its CO2 emissions rise by 19.7%. Diesel vehicles are particularly hard hit, with their CO2 emissions soaring by 30g/km, while petrol-hybrid are up by 29.3g/km.
The government has introduced changes to the benefit in kind tax system to avoid passing all of the tax increase onto drivers, but cap hpi has calculated that average company car tax bills will rise by £714 (€810) per car per year, while road tax will go up on average by £300 (€340) per year.
Across all new cars sold in the UK, not just company cars, average emissions will rise to 161g/km under WLTP tests, compared to 135g/km with NEDC.
Jonathan Clay, head of vehicle identification at cap hpi, warned that: “Some sectors are more affected than others, which will undoubtedly drive a change in the shape of the UK car parc.”
While luxury executive and supercars will see no increases in the CO2 emissions under WLTP, the MPV sector will see benefit in kind tax rise by 3.5%, upper-medium cars by 3.3% and superminis by 3.2%, said Clay.
The winners are petrol plug-in hybrid cars, which have seen an average 5% fall in their company car tax, and electric cars, which incur no benefit in kind tax this year in the UK.
Clay warned tax-sensitive company car drivers to be careful with the options they specify with their new cars. WLTP tests are model specific, which means some extra options could move a company car into the tax band above.