Extension of First Year Allowance (FYA) for cars, Zero Emission Goods Vehicles (ZEGVs) and Gas Refuelling Stations
Published 29 December 2020
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This publication is available at https://www.gov.uk/government/publications/extension-of-first-year-allowance-for-cars-zero-emission-goods-vehicles-and-gas-refuelling-stations/extension-of-first-year-allowance-fya-for-cars-zero-emission-goods-vehicles-zegvs-and-gas-refuelling-stations
Project objectives
The government announced the final year in which new cars powered by petrol, diesel or hybrid engines may be purchased, was to be brought forward from 2040 to 2035.
In order to support this change and influence businesses to move away from CO2 emission vehicles, at Budget 2020 an extension was announced to current First Year Allowance (FYA) reporting for Business cars, Zero Emission Goods Vehicles (ZEGVs) and Plant & Machinery (P&M): Gas Refuelling Stations to 2025.
For business cars, CO2 thresholds are to be reduced with only zero emission cars to receive the full FYA, with a requirement to report these zero emission cars independently to other FYA claims.
The scope of the project is to:
- extend reporting of FYA for cars, ZEGVs and gas refuelling stations to 31 March 2025
- introduce additional boxes and guidance on both Self Assessment and Corporation Tax returns to allow customers to report and claim zero emission cars in line with the new policy change
- reduce the CO2 thresholds for FYA, main and special rate, in respect of business car claims
Customer groups affected
The customer groups that will be impacted by the change are:
- agents
- third party software developers
- sole traders
- Limited Companies
- partnerships
What customers will need to do
This change will allow customers to be able to claim the FYA for cars independently to other FYA claims and make any adjustment if they dispose of the asset via the specific box on the respective tax return.
There will be a change to the CO2 band thresholds that customers use to claim allowances for low emission cars. With the extension to FYAs, customers will continue to report business as usual for Plant & Machinery (P&M) Gas Refuelling Stations and ZEGVs until 2025.
From April 2021, customers will need to provide details of any zero emission cars purchased and FYA claimed when completing their 2021 to 2022 tax return.
Customers will need to do this for:
- Corporation Tax: April 2021 (depending on accounting period)
- Self Assessment: April 2022
Assessing the impact
We assessed the equality impacts on all the protected characteristic groups in line with the Equality Act and Public Sector Equality Duty and section 75 of the Northern Ireland Act:
- racial groups
- disabled and not disabled
- gender
- gender reassignment
- sexual orientation
- age
- religion or belief
- pregnancy and maternity
- marriage and civil partnership
- people with dependents and those without
- political opinion (for Northern Ireland only)
- people who use different languages (Including Welsh Language and British Sign Language)
We do not anticipate that there will be impacts on customers within any of the protected characteristic groups. Extra support will be provided if needed.
Opportunities to promote equalities
We have considered opportunities to promote equalities and good relations between people in each of the protected characteristic groups and those outside of that group. None have been identified within the scope of this project.