The government has confirmed that all zero emission vehicles will pay no company car tax in 2020-21, 1% in 2021-22, and then return to the planned 2% rate in 2022-23 – it said that this is in order to encourage the uptake of zero emission models.

This was announced on 9 July in HM Treasury’s response to the December 2018 Review of WLPT and Vehicle Taxes, which said that the vehicle tax system plays an important role in supporting ambitions for all new cars sold to be zero emission by 2040.

HM Treasury also confirmed that, for cars first registered from 6 April 2020, most company car tax rates will be reduced by 2ppt in 2020-21 before returning to planned rates over the following two years, and that a call for evidence on vehicle excise duty will be published later this year.

UK Government