Major VED road tax and company car tax rate changes planned for 2020

The Government is aiming to base VED and BIK company car tax rates on the much tougher WLTP emissions tests from 6 April 2020

Emissions testing pipe

The way Vehicle Excise Duty (VED) and company car tax is calculated is set to change from 6 April 2020, according to new Government proposals. 

In September last year, the Government began replacing the existing New European Driving Cycle (NEDC) emissions tests with the tougher, Worldwide harmonised Light vehicles Test Procedure (WLTP) as a means of measuring fuel economy and emissions of new cars.

Current VED and BIK company car tax rates are still based on the CO2 rates achieved under the NEDC test, but from 6 April 2020, the Government is aiming for the vehicle tax on new cars to be based on the emissions achieved under the much tougher WLTP cycle.

Though manufacturers are already required to display the emissions and economy that new models achieve under WLTP testing, their VED road tax rates are still determined by CO2 ratings mesured under the NEDC test. This is partly because the 2020 target for manufacturers to achieve average fleet emissions of 95g/km is based on the NEDC test cycle. 

New real-world car mpg and emissions tests introduced 

The DfT consultation says: "We are proposing that the change-over to WLTP specific CO2 emissions should take place from 6 April 2020. This will align with the use of the new CO2 figures for VED and company car taxation purposes." 

According to the European Automobile Manufacturers Association, the WLTP tests will "result in a higher g/km CO2 value for a specific vehicle compared to the NEDC, simply because it is more rigorous than the old test." However, the association states that the move to WLTP-based vehicle taxes "should not negatively impact vehicle taxation by increasing costs for the consumer." 

What do you think of the new WLTP test? Tell us in the comments below... 

Most Popular

New Dacia Duster facelift priced from £13,995
Dacia Duster facelift - front
Dacia Duster

New Dacia Duster facelift priced from £13,995

The Dacia Duster has been updated for 2021 with subtle design tweaks and a new eight-inch infotainment screen
2 Aug 2021
SEAT Ateca and Tarraco SUVs given small updates for 2021
SEAT Ateca
SEAT Ateca

SEAT Ateca and Tarraco SUVs given small updates for 2021

The SEAT Ateca and SEAT Tarraco get extra tech as standard and a range of cosmetic upgrades
3 Aug 2021
New Renault Kangoo 2021 review
Renault Kangoo Van - front
Renault Kangoo Van

New Renault Kangoo 2021 review

We get an early drive of the new Renault Kangoo van
3 Aug 2021