Ulra Low Emission Vehicles and Diesel Supplement Company Car Tax Exemption changes



Supporting the Government’s commitment to improving air quality in towns and cities, HMRC are adjusting the car and car fuel benefit calculation. From 6 April 2020, 11 new bands for ultra-low emission vehicles (ULEVs) including a separate zero emissions band, will be introduced.


If a car has a CO2 emission figure of 1-50g/km you will now need to provide the car’s zero emission mileage. This is the distance that the car can travel in miles on a single electric charge.



How this affects you


There will be no change to the way you currently report your Company Car Tax data. However, you may need to provide additional information.


Reporting a new company car or one made available to an individual for the first time in the 2020-2021 tax year


From 6 April 2020 a new zero emission mileage field will be shown on the form P46 (car). If a hybrid car has a CO2 emission figure of 1-50g/km you will now need to provide the car’s zero emission mileage. This is the maximum distance in miles that the car can be driven in electric mode without recharging the battery.


The online P46 (car) will be updated with the changes. For paper P46 (car) submissions you will need to ensure you complete the latest version as historic copies may not include the new zero emission mileage field. These will be available through your established method from 6 April 2020.


Payrolling the company car and car fuel benefit through FPS


From 6 April 2020 if a hybrid car has a CO2 emission figure of 1-50g/km you will now need to provide the car’s zero emission mileage figure in the new field.


Where to find the additional zero emission mileage information


If you are leasing the vehicle, you should obtain this new data item in the same way you currently receive your Company Car Tax data from the car leasing firm or fleet provider.


If you own the vehicle, the zero emission mileage figure can be found on your vehicle’s Certificate of Conformity.


If, in extreme circumstances this information is not available, you can obtain the zero emission mileage figure via the car manufacturer. HMRC does not hold this information.


Failure to obtain the data via the correct source could lead to incorrect company car benefit in kind being calculated.Note: The zero emission mileage may be displayed as ‘electric range’ on the Certificate of Conformity.


If the zero emission mileage figure is displayed on the Certificate of Conformity in kilometres, the figure will need to be converted into miles before updating this field on the P46(car), through payroll or providing the figure to your employee. You should round the converted figure up to the nearest whole number.


If you are a car leasing firm or fleet company


From 6 April 2020 you will need to provide the zero-emission mileage figure to your customers as part of any established Company Car Tax data share you have in place.


When purchasing a vehicle, you should obtain and keep the car’s Certificate of Conformity. This document will hold the vehicle specific zero emission mileage information.


Diesel Supplement Company Car Tax Exemption changes


In April 2019 we informed you of Diesel Supplement Company Car Tax changes and how cars that meet the Euro 6D standard will now be exempt from the entire Diesel Supplement charge.


How to report a diesel company car on your P11D submission


When completing Section F Car and Car Fuel of the 2019-2020 P11D you will need to complete the question ‘type of fuel or power used’ with the correct key letter:

• Cars that meet the Euro 6D standard will use fuel letter F

• Cars that don’t meet the Euro 6D standard will use the fuel letter D.


Working sheet 2 and Working sheet 2b Table 1 will be updated to include the explanation.


How to report diesel company cars for payroll


When payrolling car and car fuel benefits there is no requirement to complete P11Ds as these benefits are included within the payroll process.


For any expenses and benefits not payrolled, normal processes should be followed in terms of P11D completion.

Need help? Speak to one of our experts on 0800 690 6355 or arrange a free consultation.

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