Q. How do the new company car tax bands favour ultra-low emission vehicles (ULEVs)?

A. Starting from tax year 2020/21, changes will be made to company car tax benefit-in-kind bands. These were first put forward in 2016 and finally confirmed in autumn 2017. The changes affect ultra-low emission vehicles, which are cars with CO2 emissions below 75g/km.

What does this mean in practice?

Until 2020 the benefit-in-kind rate for company car tax does increase for sub-75g/km ULEVs with even zero emission cars rising to 16% tax banding in 2019/20.

However, in 2020 all electric vehicles will drop to a 2% rate under the new company car tax incentives.