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HMRC favours low emission vehicles in company car tax paper

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COMPANY CARS which emit high levels of CO2 will be subject to a higher level of tax, HMRC has revealed in a CCT policy paper.

There will be a three percentage point differential between the 0-50 and 51-75g CO2/km bands and between the 51-75g and 76-94g CO2/km bands.

The measure also sets the level of the appropriate percentage for the years 2017 to 2018 and 2018 to 2019 for cars which do not have a registered CO2 emissions figure and which cannot produce CO2.

From 6 April 2017, the appropriate percentage for cars which do not produce CO2 will be set at 9%. This will be increased to 13% by April 2018 and 16% by April 2019.

HMRC predicts that these changes to company car tax will bring in £315m in tax in 2019 to 2020 and £320m from 2020 to 2021.

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