Car tax changes could see petrol, diesel and electric owners impacted from today

The Benefit in Kind (BIK) tax rates will rise across all fuel types for cars registered after April 6, 2020.

Annual updates to the charge sees rates increase by 1% which could become more costly for hundreds of drivers.

Owners of models emitting between 165 and 169g/km of CO2 will now pay 37% BiK charges instead of 36% from last year.

Those emitting between 155 and 159g/km will now pay 35% while those generating 130 to 134g/km pay 30% instead of 29% tax.

The rates were scrapped from 16% to zero for fully electric cars from last year in a bid to boost these kinds of models.

But the rates will rise to 1% for new owners and those registered cars before April 6, 2020.

This marks the first major tax rise for electric cars which have been exempt up until now.

According to Octopus Electric Vehicles CEO Fiona Howarth, the "incredibly low rates" will encourage more to switch to electric cars.

Fiona told Express.co.uk how company car tax rates are increasing to more than 30% for some petrol and diesel cars.

She said: "Low rates for electric cars – just 1% and increasing to 2% for the next three years – make going electric a no brainer.

"Not to mention the many great electric cars being launched this year and savings of up to 90% that can be made on fuel."

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Meanwhile, experts at PodPoint predicted the 1% rise could still see costs increase by over £100 for some electric car owners.

This is because the Benefit in Kind value for a new Nissan Leaf would be around £297.90, which is 1% of the £29,700 car value.

It would be divided by the amount of income tax drivers pay on their salaries with higher earners issued heavier fines.

For example, those who pay 20% income tax, the new 1% charge would cost drivers an extra £59.59 per year.

As for those who pay 45% income tax, they would pay up to £134.06 per year under the scheme.

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