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Budget 2014: Days Contract hire comments on Statement

Commenting on the changes to company car tax, Williams said: ‘The decision to increase benefit-in-kind tax rates by a further two percentage points on company cars emitting more than 75 g/km in 2017/18 and 2018/19 will further encourage fleets to seek out ultra-low emission models whilst always ensuring they are fit for purpose.

‘However, in announcing company car tax rates for 2017/18 and 2018/19 the Chancellor is giving little in the way of incentives to employees to select ultra-low emission models.

‘For example, an employee choosing a zero emission electric vehicle as their company car in 2014/15 will pay 0% benefit-in-kind tax, but will be subject to a 13% tax rate in 2018/19.

‘What’s more in 2018/19, the benefit-in-kind tax rate for cars with CO2 emissions of 0-50 g/km will rise by four percentage points to 13% compared with 2017/18 (9%), while the rate for cars with emissions from 51-75 g/km will rise by three percentage points – increases that are more than the rises announced for higher emissions vehicles.

‘The move to ever more efficient cars influenced by vehicle taxation was always going to erode Government tax revenues, but surely drivers selecting the very ultra-low emission cars ministers want them to drive should be not penalised unfairly.’

He also said of fuel duty: ‘The decision not to increase fuel duty before the May 2015 general election is a welcome move.

‘However, to further speed up economic recovery a cut in fuel duty would have been more helpful to businesses across the UK.’

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Natalie Middleton

Natalie has worked as a fleet journalist for 16 years, previously as assistant editor on the former Company Car magazine before joining Fleet World in 2006. Prior to this, she worked on a range of B2B titles, including Insurance Age and Insurance Day. As Business Editor, Natalie ensures the group websites and newsletters are updated with the latest news.