HM Revenue and Customs (HMRC) has confirmed that companies operating vehicles fitted with ‘defeat devices’ will not face a rise in company car tax.
The confirmation follows the revelations that Volkswagen Group cheated in official nitrogen oxide (NOx) emissions tests in the US. Some media reports have suggested that the software changes might affect fuel performance and therefore CO2.
However, fleets and company car drivers can rest assured that irrespective of the outcome of VW's solution, their cars will not be rebanded for benefit-in-kind (BIK) or Vehicle Excise Duty (VED) so their monthly cost will be unchanged.
A spokesperson at HMRC said: “Company car tax is based on the CO2 emission figures for the particular type of car, shown on either the UK approval certificate or the EU approval certificate. As the car benefit charge is calculated on the basis of the figures shown on the approval certificates, the tax position for benefit-in-kind purposes remains unchanged.”