Friday, 16 February 2018

Updates to Company Car Tax to arrive in April 2020

Updates to Company Car Tax to arrive in April 2020

From 06 April 2020, the way in which cars will be measured for company car tax purposes and Vehicle Excise Duty will change. The government has proposed to switch over to the World Light-duty Test Procedure (WLTP) for company car tax alongside the previously announced Vehicle Excise Duty change, moving away from the current NEDC (New European Driving Cycle) measurement.

WLTP has been designed to more accurately reflect the likely fuel consumption of vehicles in real world conditions, although the government does recognise this could be influenced by an individual’s driving style and prevailing driving conditions.

What is WLTP?

WLTP is a new way of measuring the emissions and fuel consumption of cars. The existing NEDC method was designed in the eighties and has become increasingly outdated, the new WLTP is based on real driving data to better match on road performance.

There are four parts to the WLTP driving cycle, all having different average speeds covering low, medium, high and extra high. Each part of the driving cycle contains different driving phases such as stops, acceleration and braking.

Each powertrain configuration will be tested with for the car’s lightest (most economical) and heaviest (least economical) version.

What is RDE?

The Real Driving Emissions test (RDE) measures emission pollutants, such as NOx, that cars produce while being driven on the road. Since September 2017 all new types of cars have to be tested for Real Driving Emissions (RDE). This is done using portable emissions (PEMS) testing equipment over real roads.

The target is 80 mg/km NOx. Under Step 1 cars are allowed to go up to 210% of this figure and under Step 2 (RDE2) cars must be within 150% (ie 120mg NOx) by 2020.

In the 2017 Budget, the Government announced from April 2018 that it would introduce an additional 1% surcharge for diesel vehicles that do not meet RDE 2 regulations. However, RDE 2 certification isn't possible until 2020, so all diesel cars will carry a 4% surcharge until that date.