Policy paper and draft legislation produced in relation to Income Tax changes to the van benefit charge
23 July 2020
HMRC has published a policy paper and draft legislation which, from tax year 2021-22, will serve to reduce the van benefit charge for zero emissions vans to zero.
Amendments to existing legislation will mean that the cash equivalent of the van benefit charge will be reduced to zero for vans emitting zero carbon dioxide emissions. This is only applicable to vans that cannot emit CO2 under any circumstances whilst being driven.
This measure was announced at Budget, in March 2020. This is in support of the government’s objectives relating to decarbonisation and air quality initiatives and encourages the use of more environmentally-friendly goods vehicles by reducing the level of tax charge that would otherwise be applicable. Vans are typically more polluting than cars and often do more mileage. A substantial amount of domestic UK greenhouse gas is created by road transport, so it is hoped that this move will help to incentivise the uptake of zero emissions vans, which will subsequently have a positive effect on the environment.
This will impact any businesses providing company zero emission vans and employees who are provided with them, where they are also made available for personal use and the restricted private use condition is not met.
Information provided in this news article may be subject to change. Please make note of the date of publication to ensure that you are viewing up to date information.