LOW-CO2 CARS: Emissions regime tightens, although choices still plentiful

Date: 13 June 2013

As of the beginning of the new tax year, cars of 94g/km or below are the only ones that enter the 10% BIK banding, rather than sub-100g/km being the low point as was previously the case. Drivers of sub-95g/km cars enjoy a percentage point gain on their tax bills compared with those at 95-99g/km, giving a select group of manufacturers a new advantage over the huge numbers of vehicles now available at 99g/km, having shaved off enough CO2 to creep into double figures by getting below 100g/km.

The banding for 76-94g/km vehicles will rise to 11% BIK in 2014-15, 13% in 2014-15 and by a further two percentage points to 15% the following year, but it's unlikely even by then that many regular diesel models without hybrid or electric powertrains will be able to break through to the 75g/km ultra low-emission category.

First-year writing-down allowances are also relevant in this banding. As of April 2013, the 100% allowance is only offered to outright-purchase fleets on vehicles of 95g/km or below, although as mentioned above, that drops again to 75g/km in April 2015. There's also confusion at present about the nuance of capital allowances being 95g/km or below, rather than sub-95g/km. The Budget documentation worded it as sub-95g/km, but Jeff Whitcombe of tax expert BCF Wessex points out that the Finance Bill worded the threshold as 95g/km or below. It's important for the handful of vehicles that emit exactly 95g/km, of which BusinessCar's tax calculator lists nine models including variants of the Ford Fiesta, Peugeot 308 and 508, VW Up and Nissan Micra.

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