From changes to the treatment of electric vehicles, to first year allowances for vehicle charge points to transfer pricing documents, below we set out miscellaneous measures contained in the Autumn Statement publications.
Electric vehicles
From April 2025, electric cars, vans and motorcycles will begin to pay Vehicle Excise Duty (“VED”) in the same way as petrol and diesel vehicles. The Government will legislate for this measure in Finance Bill 2022.
This means that:-
- ·new zero emission cars registered on or after 1 April 2025 will be liable to pay the lowest first year rate of VED (which applies to vehicles with CO2 emissions 1 to 50g/km) currently £10 a year. From the second year of registration onwards, they will move to the standard rate, currently £165 a year;
- zero emission cars first registered between 1 April 2017 and 31 March 2025 will also pay the standard rate;
- the Expensive Car Supplement exemption for electric vehicles is due to end in 2025. New zero emission cars registered on or after 1 April 2025 will therefore be liable for the expensive car supplement (“ECS”). The ECS currently applies to cars with a list price exceeding £40,000 for 5 years;
- zero and low emission cars first registered between 1 March 2001 and 30 March 2017 currently in Band A will move to the Band B rate, currently £20 a year;
- zero emission vans will move to the rate for petrol and diesel light goods vehicles, currently £290 a year for most vans;
- zero emission motorcycles and tricycles will move to the rate for the smallest engine size, currently £22 a year; and
- rates for Alternative Fuel Vehicles and hybrids will also be equalised.
Electric vehicle charge points
The Government will legislate in Spring Finance Bill 2023 to extend the 100 percent first year allowance for electric vehicle charge points to 31 March 2025 for corporation tax purposes and 5 April 2025 for income tax purposes.
Company car and van taxation and fuel benefit
The Government also set out the rates for company car and van tax until April 2028, which will feature in Autumn Finance Bill 2022, to provide long term certainty for taxpayers and industry.
Rates will continue to incentivise take up of electric vehicles and will be set as follows:-
- the appropriate percentages for electric and ultra-low emission cars emitting less than 75g of CO2 per kilometre will increase by 1 percentage point in 2025/26, by a further 1 percent in 2026/27 and a further 1 percent in 2027/28 up to a maximum percentage of 5 percent for electric cars and 21 percent for ultra-low emission cars; and
- rates for all other vehicles bands will increase by 1 percentage point for 2025/26 up to a maximum appropriate percentage of 37 percent and will then be fixed in 2026/27 and 2027/28.
From 6 April 2023, both car and van fuel benefit charges and the van benefit charge will increase in line with inflation. The Government will legislate for this by way of Regulations in December 2022.
Climate Change Levy (“CCL”) rates
Fulfilling the Budget 2016 commitment to equalise the CCL main rates on gas and electricity in the UK by 2025, the Government will legislate in Spring Finance Bill 2023 to raise the CCL main rate on gas to £0.00775/kWh whilst freezing the CCL main rate on electricity at £0.00775/kWh in 2024/25.
The CCL main rate on solid fuels will rise in line with the increase in the CCL main rate on gas to £0.06064/Kg in 2024/25. To help ensure the tax system treats fuels that are used off the gas grid equitably, the Government will maintain the CCL main rate on LPG at £0.02175 in 2024/25.
The percentage discount on the CCL main rates available through the Climate Change Agreement scheme will be fixed at 92 percent for electricity and 77 percent for LPG. The discounts for gas and solid fuels will be adjusted to 89 percent to produce an RPI increase from 2023/24 into 2024/25.
Transfer pricing
From April 2023, large multinational businesses operating in the UK will be required to keep and retain transfer pricing documentation in a prescribed and standardised format, as set out in the OECD’s Transfer Pricing Guidelines (Master File and Local File).
This aims to give businesses certainty on the appropriate documentation they need to keep and should also enable HMRC to effectively identify risks and conduct transfer pricing investigations more efficiently. This will be legislated for in Spring Finance Bill 2023.
HMRC will continue to consult on a Summary Audit Trail for transfer pricing which is a questionnaire that businesses would be required to complete that covers the main steps undertaken in preparing the Local File.
Stamp Duty Land Tax
In September’s mini-budget, the Government increased the nil-rate threshold of Stamp Duty Land Tax (“SDLT”) from £125,000 to £250,000 for all purchasers of residential property in England and Northern Ireland and increased the nil-rate threshold paid by first-time buyers from £300,000 to £425,000. The maximum purchase price for which First Time Buyers’ Relief can be claimed was increased from £500,000 to £625,000.
This will now be a temporary SDLT reduction and will remain in place until 31 March 2025. The Government will amend the Stamp Duty Land Tax (Reduction) Bill to implement this measure.
Annual tax on enveloped dwellings (“ATED”)
The annual chargeable amounts for the ATED will be uplifted by the September CPI figure of 10.1 percent for the 2023/24 ATED charging period. This uplift is set out in existing primary legislation. The Government will implement these changes in the usual way through a Treasury Order.
Licence applications
The requirement to make the renewal of certain licenses in Scotland and Northern Ireland conditional on applicants completing checks to confirm they are appropriately registered for tax will now come into force for license renewals from October 2023 rather than April 2023.
This will be legislated for in Spring Finance Bill 2023 and aims to provide licensing bodies and license holders with additional time to prepare.
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