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BiK changes increase importance of whole-life costing

By / 7 years ago / Latest News / No Comments

From this date, the 120g/km qualifying threshold for "QUALEC" vehicles (Qualifying Low Emission Cars) is being abolished, with the new 10% low rate band applying for company cars up to 99g/km. Above this level, company car tax will increase by 1% for each 5g/km rise in CO2.  

As a result, cars emitting from 100g/km up to 120g/km, which previously qualified for the 10% band (13% for diesels) will be applicable for higher tax bands from 2012/13. As well as affecting drivers, this will impact employers through National Insurance Contributions, which is based around the taxable list price and CO2 emission of the company car.  

This means that organisations which currently have company cars on their fleets with CO2 emissions of 120g/km or less will need to push CO2 even lower.   

However, by using whole-life costs to base the fleet policy on, firms can help plan ahead for tax changes to ensure they are not paying over the odds.

Paul Lippitt, principal consultant at Lex Autolease, said: 'Organisations need to ensure that they adopt a total whole-life cost approach to their fleet, by taking VAT, National Insurance and fuel on top of the monthly lease price.   

'In this way all planned costs, which vary from vehicle to vehicle, are considered. This approach can work for all company cars across the vehicle fleet, balanced with the need to ensure the vehicles selected are fit for purpose and appropriate to the employee's seniority.'

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