DIESEL cars featuring 48V mild-hybrid technology will be exempt from the 4% government surcharge on diesels, regardless of whether they are RDE2 compliant or not.

The change in status follows an announcement from the DVLA and HMRC that mild hybrids would be eligible for both the lower rate of BIK taxation as well as reduced VED under the alternative fuel discount scheme.

Initially, the DVLA and HMRC ruled that because such vehicles could not be propelled by electric power alone, as it would be in a full hybrid system, they would continue to be taxed for both their VED and BIK as a conventional petrol or diesel engine.

What this means for brokers and their customers is that such mild hybrid diesel cars won’t be subject to the 4% diesel supplement even if it’s a non-RDE 2 qualifying car. Essentially, a mild hybrid will be treated the same as a self-charging hybrid or a plug-in hybrid. Furthermore all mild hybrids, whether petrol or diesel, will qualify for the annual £10 VED discount.

Jeff Whitcombe, tax consultant, BCF Wessex

Data provider cap hpi says it now has over 1200 derivatives, including the Audi A4 TDI pictured, that meet the alternative fuel discount requirements and has added a new flag in its New Vehicle Data (NVD) technical data under alternative fuel qualifying.

Jon Clay, head of vehicle identification at cap hpi said: 

“cap hpi leads the industry in providing the data companies need to operate efficiently and profitably under WLTP regulations. It’s important that fleets are able to stay on top of the evolving taxation regime.

“We’re able to take this data and discover unique and important insights for our customers that will help them conduct new business even more profitably and provide better options for their customers.”

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