The current graduated table of company car tax bands will be extended down to a new 10% band and all carbon dioxide emissions thresholds moved down by 5g/km on 6 April 2012, so that the 10% band will apply to company cars with emissions up to 99g/km.
Qualifying low emissions cars will therefore no longer exist as a separate category.
The appropriate percentage for electric cars is to be reduced from 9% to 0% for the purposes of company car tax. This reduces the car benefit charge for electric cars to nil.
Similarly, a nil flat rate benefit charge is to be introduced for electric vans. It is currently set at £3,000.
Both measures will have effect on and after 6 April 2010 for five years.
Fuel benefit
With effect from 6 April 2010, the fuel benefit charge for company cars and vans will be increased to £18,000 (up from £16,900), and private fuel benefit in respect of company vans will rise from £500 to £550.
Capital allowances
Subject to confirming the state aid position, a 100% first-year allowance is to made available for business expenditure on new electric vans.
The measure is planned to have effect for expenditure incurred on or after 1 April 2010 (corporation tax) or 6 April 2010 (income tax).
