Treasury announces freeze on company car tax

Written by Ellie

The government has announced it will be freezing company car tax, as well as making future changes to such costs more transparent.

Changes in tax rates explained

For those with vehicles registered before April 6th 2020, company car tax bands will stay at the 2020-21 tax rate until 2022-23.

Anyone registering new cars after April 6th 2020 will benefit from a tax cut of two percentage points, while zero-emission company cars will not be required to pay any tax at all.

Following this, company car tax rates will then increase by just one percentage point in 2021-22 and 2022-23.

Going forward, the government also promised to announce percentage rates and changes at least two years prior to their implementation in order to help business owners and fleet operators to plan more effectively.

It is thought the new measures could benefit around a million drivers of company cars, as well as acknowledging the partnership needed with fleet owners in the transition to greener vehicles.

The British Vehicle Rental and Leasing Association has welcomed the decision to freeze tax, with spokesperson Jay Parmar saying it shows the government is more appreciative that the fleet industry can help to deliver its wider economic and environmental ambitions.

He added: “The Treasury is giving back some of the unfair company car tax windfall it was set to receive … and providing some essential extra visibility on future tax costs for those looking to order their next vehicle. This is a good day for company car drivers and our members.”

Ellie Baker, brand manager at Fuel Card Services, comments: “Company car tax is just one of the many costs associated with running a business, but this freeze could provide a vital saving for fleet operators across the country.”


Posted on 11th July 2019

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