WLTP — the company car tax that’s fast creeping up on us

  • By John Wilmot
  • 1 min read

What is WLTP and why should you care?

A graphic of a human wrist with a watch and a car tax contract.

What is WLTP and why should you care?

Firstly, it stands for Worldwide harmonised Light vehicles Test Procedure. In 2020 this will replace NEDC (New European Driving Cycle) as the measure for how much CO2 your car produces.

The impact?

Generally CO2 readings are higher under WLTP. As your company car tax is based on the CO2 emissions, this means more tax.

Ah, but that’s 2 years away I hear you say. Well, not quite. If you take out a 4 year lease, your last 2 years’ company car tax bill will be based on WLTP. Also, due to different tyres and suspension setups on different models, each model will have its own WLTP CO2 rating — so a BMW 320d SE and and M Sport may result in different company car tax rates.

Part of the issue right now is nobody knows what the cost increase is going to be but rest assured HMRC aren’t going to be using it as a way to cut your income tax liability!

If you’re worried about it, go for a 2 year lease and then you can review properly when the changes come into effect.

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