2017 Spring Announcements Budget for company cars
- NEW Vehicle Excise Duty (VED): As announced in the Autumn 2015 Budget, substantial VED reforms affect all new cars registered on or after April 1st 2017. Cars already registered at that date remain in the VED system current at March 31st 2017, with a Retail Price Index-linked rise in the Standard rate for cars in Band D and above.
- NEW Company car tax (CCT) bands: The Chancellor confirmed new, lower tax bands for the lowest emitting cars from April 2020. The appropriate percentage for zero-emission cars will be 2%, while those for cars with CO2 emissions of between 1g/km and 50g/km will vary between 2% and 14% depending on the number of zeroemission miles the vehicle can travel. The appropriate percentages for cars with CO2 emissions of 51g/km and above rise by one percentage point to a maximum value of 37%. The new bands and rates are shown on page 4.
- NEW Fuel benefit charge (FBC): The Government fuel benefit charge (FBC) used to calculate the tax due on employer-provided fuel for private use rises from £22,200 to £22,600 from April 6th 2017. For vans, the benefit charge rises from £598 to £610 from the same date.
- NEW Van benefit charge (VBC): For conventionally fuelled light commercial vehicles, including ‘Double-Cab’ pick up trucks, the VBC rises from £3,170 in 2016/17 to £3,230 in 2017/18, or £3,840 if the employer also provides ‘free’ fuel for private mileage.
- NEW Van benefit charge (VBC) for zero-emission vans: VBC is supported on a tapered basis until 2020. In 2017/18 the VBC rate paid by electric vans rises from 40% of the rate paid by conventionally fuelled vans to 60%, 80% in 2018/19 and 90% in 2019/20, with the rates equalised in 2020.
- NEW Vehicle Excise Duty for vans: Retail Price Index-linked rises in VED for vans come into force on April 1st 2017, with the new rates shown on page 7.
- NEW Air quality: The Government will consult on a detailed draft plan in the spring which will set out how the UK’s air quality goals will be achieved. Alongside this, the Government will continue to explore the appropriate tax treatment for diesel vehicles, and will engage with stakeholders ahead of making any tax changes at Autumn Budget 2017.