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Car tax is changing, make sure you are prepared

When you use a car for business purposes or have a company car there’s so much more to consider than just the make, model and your favourite colour (although we would recommend a Toyota to also take advantage of our exclusively negotiated discounts). The biggest of these is normally the tax implications; it’s certainly not something you want to get caught out not knowing about. In partnership with Toyota, we wanted to let you know about some important changes in how vehicles are tested for emissions. It’s been a hot topic for quite a while now and Toyota are at the forefront of ensuring their vehicles are efficient from the start, or they update models to ensure they are moving forward, so you don’t get caught out.

So what’s changing?

With advances in vehicle technology and changes in driving conditions the nearly 40-year-old NEDC driving cycle test is being replaced.  The new testing method is called the Worldwide Harmonised Light Vehicle Test Procedure (WLTP) and it’s focused on fuel economy and emissions. It’s based on rigorous laboratory testing that is more relevant to real driving data and better matches on-road performance data.

The devil is in the detail

Here are some of the specifics that are changing:

  • Average and max speeds: average speed is increasing by 12.5km/h to 46.5km/h, with maximum sped raised to 131km/h.
  • Test temperature: measurements are now taken at a specific temperature of 23C, rather than the previous range of between 20C and 30C.
  • Driving phases: these have been adjusted to 52% urban and 48% non-urban.
  • Cycle time; tests no last 30 minutes, an increase of ten minutes.
  • Gear shift: each vehicle has different, rather than fixed, gear shift points.

So what does this mean for you?

Due to the change introduced by WLTP the fuel consumption figures and CO2 emissions measured are, in many cases, higher than when compared to those under NEDC.  This means the following can be affected:

  • Benefit in Kind company car taxation
  • Vehicle Excise Duty
  • Congestion Charge
  • Writing Down Allowance

In addition, once WLTP is fully implemented and used for taxation purposes, optional extras and accessories can also have an impact.

When is it happening?

From September 2018, all new vehicles are being tested using WLTP, but taxation is still based on the previous NEDC approach.  The NEDC figures are still what you will see on your V5 document and any marketing material. From January 2019 the impact of optional extras will be visible on documentation, but tax is still based on NEDC.From April 2020 NEDC will be completely phased out and taxation will be based on the WLTP approach – and this is what you will see on all vehicle documentation.

bira bank’s approach

As with everything we do, transparency and clarity are key.  We are delighted that Toyota will be introducing up to nine updated or new models in 2019 which So, if you choose to buy a Toyota or Lexus through our scheme you can request new and updated figures, as well as their impact, from Toyota on request.