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BiK Rates Company Car Tax

Budget 2015: BVRLA expresses concern over BiK changes

BVRLA director of policy & membership Jay Parmar said: “We’re encouraged that the Government has responded to our calls to reduce the pace of company car tax increases on ultra low-emission vehicles in 2019-20. Sadly, George Osborne has chosen not to go further, and the Government now runs the serious risk of reducing the tax incentive between ultra low-emission vehicles and higher-polluting models.”

Company car tax will see a rise by 2 percentage points for cars emitting more than 75g/km to a maximum of 37% until 2018-19 after which there will be rise of 3 percentage points for 2019-20. In 2017-18 there will be a 4 percentage point differential between the 0-50 and 51-75g/km bands and between the 51-75 and 76-94g/km bands. In 2018-19 this differential will reduce to 3 percentage points.

Parmar commented “This is likely to cost the industry an extra £340m in 2019-20, according to Government estimates, which is a 171% tax rise compared to what the industry was expecting from the 2014 Budget. We’re disappointed the Government is accelerating the rate of increase in company car tax that thousands of motorists will pay, at the same time as putting the brakes on the take-up of ultra low-emission cars.“

Commenting on the other measures announced by George Osborne, the BVRLA welcomed the additional £100m allocated to support driverless cars in the UK. “Our industry looks forward to getting involved with the exciting trials in Greenwich, Coventry, Milton Keynes and Bristol and we are working with government departments, agencies and technology companies to help unlock the enormous potential for intelligent mobility in our sector,” Parmar added.

Elsewhere in the Budget, the BVRLA welcomed the news that government departments will consider car sharing alongside more traditional transport options. Parmar said: “Public sector fleets rely too much upon inefficient and unsustainable grey fleet transport. In urban environments, car sharing and car clubs make far more sense, and we’re pleased the Government has updated its procurement advice accordingly and acknowledged the vital role of our sector in saving costs and supporting the environment.”

The BVRLA also welcomed the decision to freeze fuel duty and the VED rates for HGVs, as well as the cut in Corporation Tax from 1 April 2016.

“We would have all welcomed a fuel duty cut, as this would have given the UK economy a further boost. But a freeze is better than a price hike, and keeping VED rates for HGVs at the same level is a step in the right direction to help motorists. While Cutting Corporation Tax to 20% will give our members a business boost and stimulate growth, it’s baffling that the Enhanced Capital Allowances for zero-emission goods vehicles are unavailable to our rental and leasing members, given the important role they play in enabling UK businesses across to access this green technology.

“Overall, this has been a hit-and-miss Budget for the motoring industry.”

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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.