Company Car Tax goes up – April 2025

As part of the Autumn Budget 2024 documentation Annex A, the company car tax rates for April 2025 have confirmed a +1% rise from 6th April 2025.

For those with Electronic Vehicles (even via salary sacrifice schemes), the company car tax (yes it is a company provided car even via a lease company) applicable rises from April 2025 by 50%. and no, the sacrifice is not a capital contribution, it’s a contractual pay cut, the employee has paid nothing for the car.

When Payrolling, the predictive and actual car benefit applied to payroll must be reported along with care details on the Real Time Information (RTI) Full Payment Submission (FPS). or else the benefit must reported at year end on forms P11D with car details reported on form P46(car).

The following highlights the uplifted appropriate percentage.

For all cars, drivers must add 4% to their appropriate percentage if the car is propelled solely by diesel (up to a maximum of 37%). Cars that meet the Real Driving Emissions Step 2 (RDE2) standard are exempt from the diesel supplement. The RDE2 standard sets a maximum permitted level of car NOx emissions in real world driving situations, and it is measured through portable emissions-measuring equipment in a variety of real driving trips. Rates for fully electric cars (0 grams per km) are capped at 5%.

Rates for ultra-low emission cars (1 to 74 grams per km) are capped at 20% for the tax year 2025 to 2026. They are capped at 21% for the tax years 2026 to 2027 and 2027 to 2028. Rates for bands 75 to 170 grams per km and above will remain frozen for the 2026 to 2027 and 2027 to 2028 tax years.

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PAYadvice.UK 1/11/2024