The government has released a ‘Review of WLTP and vehicle taxes’ which seeks evidence on the impact of a change to using the World Harmonised Light Vehicle Test procedure (WLTP) to measure CO2 emissions on Vehicle Excise Duty and Company car tax from April 2020.

Since 2002 Company car tax has been based on the CO2 emission rating of the vehicle. Currently this is measured by the new European Driving Cycle (NEDC) test. From April 2020 it is proposed that new cars will be measured under a different, more rigorous test, the WLTP.

The review document deals with both VED and company car tax. The government has said that:

  • Initial evidence provided by manufacturers suggests that over 50% of cars will see an increase from NEDC to WLTP of between 10% and 20%.
  • Due to the change, the OBR forecasts that company car tax receipts (income tax and Class 1A national insurance) will increase by £100 million in 2020-21, and £400 million in 2023-24.
    • Comparable data by vehicle make and model does not currently appear to be readily available, but this suggests that using WLTP as a measurement of CO2 may significantly increase company car tax from April 2020.
    • As they are changed more often than private vehicles, 90% of company cars are expected to fall under the new rules by 2023-24.

Any changes required to the tax rules to implement this will be included in Finance Bill 2019-20. It will not affect capital allowances on cars.

The review questions are:

Q1 The government is interested in gathering further data on the impact of WLTP on reported CO2 emissions for conventionally fuelled cars. What evidence can you provide on the differences between NEDC and WLTP reported figures for similar models of cars?

Q2 What further evidence can you provide on the impact of WLTP on reported CO2 emissions and zero emission mileage for ULEVs?

Q3 How should the government balance the factors (a-e) outlined when considering whether to introduce changes to VED and company car tax on introduction of WLTP?

Q4 Do you agree that, if the government makes changes to the vehicle tax system, the adjustment should be simple? If not, why?

Since the proposed change will only apply to new cars registered after April 2020, company car users may wish to consider bringing forward changing their car, obtaining their vehicle by an alternative route in future, or switching to a more eco-friendly option such as a bike or low emission vehicle.

Responses to the review should be sent to This email address is being protected from spambots. You need JavaScript enabled to view it. by 17 February 2019.

Links to our guides:

Company cars

CO2 emissions: appropriate percentages

P11Ds: top tips toolkit

External link:

Review of WLTP and vehicle taxes

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