Tax Benefits of Electric Cars

Tax Benefits of Electric Cars
The government has announced that there will be a zero P11d benefit for the drivers of electric cars from 2020/21. This is instead of the 2% scale charge that was in the Finance Act 2017 to apply for 2020/21. The legislation for the change will be in the 2020 Finance Bill and is proposed that the benefit will be 1% of list price in 2021/2 and then 2% in 2022/3.
 
The zero taxable benefit will also apply to hybrid cars emitting no more than 50 grams of CO2 per kilometre with a range using its electric motor of at least 130 miles, but only for electric cars first registered on or after 6 April 2020. For those registered before 6 April 2020 the scale charge will be 2%.
 
Rather confusingly there will be two different sets of scale charges from 2020/21. One set relating to those registered before 6 April 2020, and a new lower set of rates for those registered on or after 6 April 2020.
 
Businesses are advised to wait until 6 April 2020 as the P11d scale charge for electric cars is currently 16% of original list price for 2019/20.

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