HMRC considers company car tax changes

THE government is consulting on the design of new ultra-low emission vehicle bands in the company car tax system.

The consultation seeks to explore how best to incentivise the cleanest cars into the next decade, a period during in which it expects rapid significant changes in the way motor vehicles are powered.

At Budget 2016, the government announced that it would consult on reform of the bands for ultra-low emission vehicles (ULEVs) in the company car tax system to refocus incentives on the cleanest cars using the latest technologies.

While views are welcomed on specific tax bands and rates, this consultation is principally seeking views on the general approach of how company car tax should be levied for ULEVs into the 2020s.

The chancellor will continue to set specific tax rates as part of the normal Budget process.

“It must be emphasised that the consultation does not provide a signal of possible future tax rates, but simply asks whether the structure of the company car tax system is effective for encouraging the take up of ULEVs, and will remain effective given changes in car technology over this period,” HMRC said.