Budget 2020 – Motoring costs

Fuel prices

Fuel duty was frozen again.

Vehicle Excise Duty (VED)

VED (Road Tax) for cars, vans, motorcycles and HGVs will increase in line with the Retail Price Index from 1 April 2020.

The Budget papers also announce that all registered zero-emission light passenger vehicles registered from 1 April 2017 until 31 March 2025 will be exempted from the VED supplement for light passenger vehicles with a list price exceeding £40,000, starting from April 2020.

Business mileage payments

HMRC sets an approved mileage allowance payment (AMAP) rate. This is the rate at which employers may reimburse business mileage tax-free.

The AMAP rate will remain at 45p for the first 10,000 miles per annum and 25p per mile for any excess.

Company Cars

Car benefit

Car benefits are based on a percentage of the list price of the car.  The percentage depends on the CO2 emissions of the vehicle.
It was announced previously that, for cars registered from 6 April 2020, the calculations for CO2 emissions will be based on Worldwide harmonised Light vehicles Test Procedure (WLTP).  WLTP are emissions tests that aim to provide a closer representation of ‘real-world’ fuel consumption and CO2 emissions.  These are generally higher than the old measure (New European Driving Cycle (NEDC)), so there are now different percentage charges for pre-April 2020 (based on NEDC) and post April 2020 (based on WLTP) registered vehicles.
The rates for 2020-21 to 2022-23 can be found on pages 4 and 5 here.
Note that there will be a 0% benefit rate for zero emission cars for 2020-21 (increasing to 1% in 2021-22 and 2% in 2022-23 and returning to ‘normal’ in 2023-24)
Van benefit
The van benefit in kind charge will increased from £3,430 to £3,490 for 2020-21.
The benefit for zero emission vans will be reduced to zero from 6 April 2021.

Fuel benefit

The base figure for calculating the benefit where private fuel is provided alongside a company car will increase to £24,500 (from £24,100) with effect from 6 April 2020.

The van fuel benefit charge will be £666 (increased from £655) for 2020-21.

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