The Government has announced a freeze on company car tax for fleet cars and the introduction of a zero Benefit-in-Kind rate for fully electric vehicles as part of its WLTP review.

Estimates say that 1 million company car drivers will benefit from the freeze.

Key points:

• Vehicles registered before 6 April 2020 getting their company car tax bands being frozen at the 2020/21 rates until 2022/23.
• People registering new cars after 6 April 2020 will see a two-percentage point tax cut while all zero-emission company will pay no tax.
• After the two-percentage point decrease in 2020/21, rates will then increase by one percentage point in 2021/22 and 2022/23.

The government has also confirmed it's aim of announcing "appropriate percentages" at least two years ahead of implementation. This will help to provide certainty for employers, employees and fleet operators.

Existing VED rates will be maintained on introduction of WLTP from April 2020 while a call for evidence will be published later this year seeking views on moving towards a more dynamic approach to VED which recognises smaller changes in CO2 emissions

The changes do not affect the Lease Rental Restriction, Capital Allowances or any other CO2-related taxes and incentives but will include fuel benefit charge.

OVL Group's Managing Director Martin Wedge says, "This is undoubtedly good news for company car drivers and businesses."