Company Cars Benefit-In-Kind Tax

The Benefit-in-Kind (BIK) tax system for company cars clearly incentivises the selection of zero or low tailpipe emission cars with a high battery range.

The appropriate percentages for BIK tax depend on the cars CO2 emissions and Its all-electric zero emission range.

For cars with zero CO2 tailpipe emissions when driving - as well as new cars with CO2 tailpipe emissions of 1-50g/km and a minimum all-electric range of 130 miles - the BIK tax rate is set at 1% in 2021/22, rising to 2% in 2022/23, at which which level the rates remain frozen until 2024/25.

Phase-out of new petrol and diesel car sales in 2030

The Government has set the phase-out date for new petrol and diesel cars for 2030, with all new cars and vans to be fully zero-emission when driving by 2035.

The move is underpinned by a commitment of over £1.8 billion to support greater uptake of zero tailpipe emission vehicles for greener car journeys.

Between 2030 and 2035, new petrol and diesel cars and vans can be sold only if they have the capability to drive a significant distance with zero tailpipe emissions, for example plug-in hybrids, with the exact models to be defined at date of publication.

See table below, for a summary of low emission tax bands: