A very handy guide from BMW outlining the changes from 1st April this year including RFL, BIK and capital allowances. If you have any questions relating to any of these changes please give me a call on 0191 2617366

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Home. March 2018
Budget update.
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ULEV
grant.
COMPANY CAR TAX.
MARCH 2018.
A GUIDE TO THE 2018/19 BUDGET FOR FLEET DECISION MAKERS.
While we have made every effort to ensure the information in this document is accurate, BMW (UK) Ltd can accept no liability for your reliance on any information contained in it. You should seek your own independent financial advice in relation to any taxation or accounting matters referred to in this document.
The fuel consumption and CO2 figures quoted are obtained under standardised EU test conditions (Directive 93/116/EEC) and are for comparative purposes for vehicles fitted with standard wheel and tyre combinations. This allows a direct comparison between different models but may not represent the actual fuel
consumption achieved in ‘real world’ driving. CO2 emissions can change if a different-sized alloy wheel is ordered with the vehicle. This may also lead to a change to the VED payable. More information is available at www.BMW.co.uk and at www.dft.gov.uk/vca. Information correct at date of publication, March 2018

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INTRODUCTION.
Raised BIK tax liabilities for diesel drivers and an increase in
Vehicle Excise Duty, with a new ‘showroom tax’ for diesels,
were highlights of the November 2017 Budget, and this Guide
includes updates from the Budget Statement on March 13 2018.
The Chancellor targeted drivers of diesel company cars with
a rise in the 3% Benefit-in-Kind diesel tax charge to 4%,
applicable from April 6 2018. The diesel VED ‘showroom tax’
measure will add up to a £520 premium at first registration
over petrol counterparts, applied to diesel models that do
not comply with the Real Driving Emissions Step 2 (RDE2)
standard. Currently, no RDE2-compliant cars are available.
A Retail Price Index-based rise in the vehicle and vehicle
fuel benefit charges and a reduction in the CO2 emissions
thresholds for capital allowances also apply from April 6 2018.
The measures were tempered by the Chancellor’s freeze on
fuel duty for 2018/19, and significant investment was also
announced for the Plug-in Car Grant (PiCG) and electric
charge point infrastructure for electric cars and hybrids.
The Budget highlights the continuing importance of choosing
cars with low emissions of CO2 – the only way to reduce tax
liabilities for drivers and fleet operators.
The BMW Guide to Company Car Tax 2018/19 examines the
implications for fleet operators and company car drivers.

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Home. March 2018
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ULEV
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VEHICLE EXCISE DUTY.
New car Vehicle Excise Duty (VED) rates are shown in the
table, above right. From April 1 2018, diesel cars that do not
meet the Real Driving Emissions Step 2 (RDE2) standard are
liable for increased first-year (or ‘showroom tax’) rates.
For cars already registered at March 31 2017, VED rates remain
in the current 13-band structure until that date, and are subject
to a RPI-based rise from April 1 2018 as shown in the table, right.
 First-year rate: Applicable to all new cars in year one, with
increased rates for diesels from April 1 2018
 Standard rate (yr2 onwards): £140 – cars with CO2
emissions of 1g/km or over with a list price of £40,000 or less
 Additional rate (yr2 onwards): £450 – cars with CO2
emissions of 1g/km or over with a list price over £40,000.
Vehicle Excise Duty: new cars from April 1 2018.
2018/19
CO2 First year rate First year rate Standard rate Standard rate
emissions (compared (for diesel vehicles (Yr2 on for cars (Yr2 on for cars
(g/km) with compared with with list price of with list price of
2017/18) 2017/18)1 £40,000 or less) over £40,000)2
0 £0 (+£0) £0 (+£0) £0 £310
1-50 £10 (+£0) £25 (+£15) £140 £450
51-75 £25 (+£0) £105 (+£80) £140 £450
76-90 £105 (+£5) £125 (+£25) £140 £450
91-100 £125 (+£5) £145 (+£25) £140 £450
101-110 £145 (+£5) £165 (+£25) £140 £450
111-130 £165 (+£5) £205 (+£45) £140 £450
131-150 £205 (+£5) £515 (+£315) £140 £450
151-170 £515 (+£15) £830 (+£330) £140 £450
171-190 £830 (+£30) £1,240 (+£440) £140 £450
191-225 £1,240 (+£40) £1,760 (+£560) £140 £450
226-255 £1,760 (+£60) £2,070 (+£370) £140 £450
Over 255 £2,070 (+£70) £2,070 (+£70) £140 £450
1
Applies to diesel vehicles that do not meet the real driving emissions step 2 (RDE2) standard. Alternative fuel vehicles receive a £10 annual
reduction. 2
All cars with a list price over £40,000 are liable for a £310 supplement for five years following the first year rate, after which the rate
reverts to the standard £140 a year. For cars with zero emissions the rate reverts to £0 after five years. New rates apply from April 1 2018
VED rates: for cars already registered at March 31 2017.
VED CO2 emissions 2018/19
band (g/km) standard rate
A Up to 100 £0 (+£0)
B 101-110 £20 (+£0)
C 111-120 £30 (+£0)
D 121-130 £120 (+£5)
E 131-140 £140 (+£5)
F 141-150 £155 (+£5)
G 151-165 £195 (+£5)
H 166-175 £230 (+£10)
I 176-185 £250 (+£10)
J 186-200 £290 (+£10)
K* 201-225 £315 (+£10)
L 226-255 £540 (+£20)
M Over 255 £555 (+£20)
Figures in brackets show comparison with 2017/18. * Includes cars emitting over 225g/km
registered before March 23 2006. 2018/19 rates apply from April 1 2018

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Home. March 2018
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Class 1A
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ULEV
grant.
COMPANY CAR TAX.
The November 2017 Budget announced a rise in the BIK
tax charge on diesel cars from 3% to 4%, applicable from
April 6 2018. The charge does not apply to diesels which
meet Real Driving Emissions Step 2 (RDE2) standards,
although currently there are no such vehicles available.
The taxable percentages of P11D price applying for 2018/19
to 2019/20 are shown above right. A new scale, which
emphasises the importance of low emissions for reduced
company car tax liabilities, is also shown, scheduled for
introduction in 2020/21.
CO2 emissions information and a Company Car Tax
calculator is available for all BMW cars by clicking HERE or
by visiting the Vehicle Certification Agency website at
www.dft.gov.uk/vca/fcb/index.asp
In 2020/21 new rates ranging from 2% to 14% apply to ultra-
low emitting cars with CO2 emissions of 0-50g/km, based on
the number of zero emission miles they can cover.
Example: BIK tax liability in 2018/19.
A BMW 118i SE 5dr has a P11D price of £22,155 and CO2
emissions of 112g/km, putting it in the 23% BIK band.
£22,155 x 23% gives a taxable value of £5,096, equating to
yearly BIK tax of £1,019 (£85/month) for a 20% tax payer, or
£2,038 a year (£170/month) for a 40% tax payer.
Taxable percentages of P11D value and capital allowance rates.
2018/19 to 2019/20 2020/21
CO2 BIK % Capital BIK % CO2 Zero BIK %
emissions 2018/19 allowance % 2019/20 emissions emissions 2020/21
(g/km) 2018/19 (g/km) range2
0-50 13 (17) 100 16 (20) 0 All 2 (6)
1-50 Over 130 2 (6)
1-50 70-129 5 (9)
1-50 40-69 8 (12)
1-50 30-39 12 (16)
1-50 Up to 30 14 (18)
51-75 16 (20) 18 19 (23) 51-54 - 15 (19)
76-94 19 (23) 18 22 (26) 55-59 - 16 (20)
95-99 20 (24) 18 23 (27) 60-64 - 17 (21)
100-104 21 (25) 18 24 (28) 65-69 - 18 (22)
105-109 22 (26) 18 25 (29) 70-74 - 19 (23)
110-114 23 (27) 18/81 26 (30) 75-79 - 20 (24)
115-119 24 (28) 8 27 (31) 80-84 - 21 (25)
120-124 25 (29) 8 28 (32) 85-89 - 22 (26)
125-129 26 (30) 8 29 (33) 90-94 - 23 (27)
130-134 27 (31) 8 30 (34) 95-99 - 24 (28)
135-139 28 (32) 8 31 (35) 100-104 - 25 (29)
140-144 29 (33) 8 32 (36) 105-109 - 26 (30)
145-149 30 (34) 8 33 (37) 110-114 - 27 (31)
150-154 31 (35) 8 34 (37) 115-119 - 28 (32)
155-159 32 (36) 8 35 (37) 120-124 - 29 (33)
160-164 33 (37) 8 36 (37) 125-129 - 30 (34)
165-169 34 (37) 8 37 (37) 130-134 - 31 (35)
170-174 35 (37) 8 37 (37) 135-139 - 32 (36)
175-179 36 (37) 8 37 (37) 140-144 - 33 (37)
180-184 37 (37) 8 37 (37) 145-149 - 34 (37)
185-189 37 (37) 8 37 (37) 150-154 - 35 (37)
190-194 37 (37) 8 37 (37) 155-159 - 36 (37)
195+ 37 (37) 8 37 (37) 160+ - 37 (37)
Figures in brackets apply to diesels. Diesel hybrids and diesel cars that meet the Real Driving Emissions Step 2 (RDE2) standard are
exempt from the diesel tax charge. 1
18% capital allowance applies to vehicles with CO2 emissions of 110g/km or less and 8% applies to
vehicles with CO2 emissions of 111g/km or more. 2
Measured in miles. Rates applicable from April 6 in each year.

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CAPITAL ALLOWANCES LEASE RENTAL RESTRICTION.
Company cars bought outright are eligible for write-down
allowances, where the capital outlay can be offset against tax.
The allowance thresholds are based on CO2 emissions.
From April 1 2018, the main rate capital allowance threshold
falls from the 2017/18 level of 130g/km to 110g/km, meaning
that for cars with CO2 emissions of 51-110g/km inclusive, the
allowance is set at 18% a year. For cars with CO2 emissions of
111g/km or more, the allowance is 8% a year.
100% first year allowance.
A 100% first-year capital allowance (FYA) applies to cars with
ultra-low CO2 emissions. From April 1 2018, the 100% FYA
threshold is set at 50g/km, reduced from 75g/km in 2017/18,
with the allowance applying until March 31 2021. Leasing
companies are excluded from claiming the first-year allowance.
Lease rental restriction.
The amounts payable on lease rentals are normally an
allowable expense for businesses that can be offset against
tax. From April 1 2018, the applicable CO2 emissions
threshold reduces in line with the thresholds for capital
allowances, from 130g/km to 110g/km.
For new cars registered from April 1 2018 with CO2 emissions
of 110g/km or less, 100% of their lease payments can be
offset against corporation tax. For those with CO2 emissions
of 111g/km or more, only 85% is claimable.

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car tax.
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allowances.
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allowances.
Class 1A
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ULEV
grant.
FUEL ALLOWANCES.
The ‘free’ fuel benefit.
BIK tax is payable by drivers receiving employer-provided ‘free’
fuel for private mileage in a company car. To calculate the tax due
on employer-provided ‘free’ fuel, the Government Fuel Benefit
Charge (FBC) is used. For 2018/19, the FBC is set at £23,400.
Calculating tax due on ‘free’ fuel.
A BMW 118i SE 5dr has CO2 emissions of 112g/km giving
a BIK tax percentage of 23% in 2018/19. Its combined fuel
consumption is 56.5mpg. £23,400 x 23% gives a taxable value
of £5,382. Multiplying by the driver’s tax rate (20% or 40% in
2018/19) derives annual tax due of £5,382 x 20% = £1,076,
or £5,382 x 40% = £2,153.
With the average price of unleaded at £5.55/gal or £1.22/litre
(March 2018), £1,076 will buy around 193 gallons (877 litres)
for a 20% tax payer; for a 40% tax payer, the figure is 387
gallons (1,759 litres).
Multiplying by the 118i SE’s combined fuel consumption figure of
56.5mpg gives 10,904 miles for a 20% tax payer, or 21,865 miles
for a 40% tax payer – the minimum private mileages you need to
cover to make the ‘free’ fuel benefit worthwhile.
If you drive fewer private miles than the calculated figures you
will be better off paying for private fuel yourself as it will cost less
than the tax you pay. On the other hand, if you drive more private
miles, you are better off paying the tax.
Business mileage, private car.
The HMRC mileage allowance payments
(MAPs) for business mileage reimbursement
in a private car are shown below for 2018/19.
The rates are the tax and NIC-free amounts
claimable per mile by a driver using his/her
own car on business.
Mileage Allowance Payment
(MAP) rates 2018/19
Up to Over
10,000 miles 10,000 miles
All cars 45p 25p

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NIC.
ULEV
grant.
CLASS 1A NATIONAL INSURANCE CONTRIBUTIONS.
Class 1A national insurance contributions are payable by
the employer on the company car benefit, and employer-
provided ‘free’ fuel for private use, is unchanged from
2017/18 at 13.8% of taxable value.
For the ‘free’ fuel calculation, the 2018/19 Government Fuel
Benefit Charge of £23,400 applies to the car’s taxable value
from April 6 2018.
Calculating Class 1A NIC – cars.
A BMW 118i SE 5dr, with a P11D price of £22,155 (March
2018) and CO2 emissions of 112g/km, attracts a tax charge
of 23% of its P11D value in 2018/19.
£22,155 x 23% gives a taxable value of £5,096. Multiplying
by 13.8% derives the annual Class 1A NIC contribution
due – £703.
Calculating Class 1A NIC – ‘free’ fuel.
Multiplying the fuel benefit charge (FBC) figure of £23,400
by the BMW 118i SE 5dr’s 23% tax charge gives a taxable
value of £5,382. Multiplying by 13.8% derives the annual
Class 1A NIC due – £743.
For further information on Class 1A NIC on car and fuel
benefits, click HERE.

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Capital
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allowances.
Class 1A
NIC.
ULEV
grant.
GOVERNMENT PLUG-IN CAR GRANTS FOR ULEVs.
A plug-in car grant (PiCG) is available for ULEVs – electric or part-
electric cars that emit 75g/km of CO2 or less. The grant is based
on a car’s emissions of CO2 and its zero-emissions range.
The Budget announced investment of an extra £100 million
in the PiCG, a new £400 million charging infrastructure fund
and £40 million to assist with charging infrastructure RD. It
also confirmed that those charging their electric vehicles at
work will not face a BIK tax charge.
ULEV grant categories 2018/19.
 Category 1: CO2 emissions of less than 50g/km and a zero-
emission range of over 70 miles receive a grant of £4,500.
 Category 2: CO2 emissions of less than 50g/km and a zero-
emission range of 10-69 miles receive a grant of £2,500.
 Category 3: CO2 emissions of 50-75g/km and a zero-
emission range of at least 20 miles receive a grant of £2,500.
A price cap is also in force: Category 2 and 3 cars with a list
price of more than £60,000 are not eligible for the PiCG, but
all Category 1 cars with a zero-emission range of more than
70 miles qualify for the full £4,500 grant. A further grant of
up to 75% of the cost of installing a charge point at home,
capped at £500 inc VAT, is also available.
For more information and a link to the Office for Low Emission
Vehicles Go Ultra Low vehicle selector guide, click HERE