Budget 2015: New BiK rates to have big impact on drivers, says GE Capital Fleet Services
In the Budget statement, Mr Osborne said: “To encourage a new generation of low emission vehicles we will increase their company car tax more slowly than previously planned, while increasing other rates by 3% in 2019-20.”
In response, Gary Killeen, fleet services commercial leader for GE Capital UK said: “For fleets, the newly announced benefit in kind taxation rates for 2019-20 are the main area of interest. They represent quite a significant increase on the rates for 2018-19 and 2017-18 that were announced in last year’s Budget.
“This will have a direct impact on the amount of tax paid by certain drivers in certain vehicles. For example, if you chose a 120g/km petrol car after April of this year and your employer runs a four year cycle, the percentage of list price on which you pay tax will rise from 19% to 28% over time.
“Even drivers of vehicles with lower emissions will be affected quite dramatically. If you opted for a car with CO2 emissions between 51 and 75g/km the increase over four years would be from 9% to 19%.
“Managing these increases will mean that employers must regularly look to their choice lists and ensure that they are offering drivers the very lowest CO2 options for their company cars in order to minimise employees’ tax bills and their own National Insurance costs. We expect this to be a major part of fleet strategy in the coming years.
“There will also, we expect, be even more pressure on motor manufacturers to bring to market ever lower emissions models on a regular basis. Even being able to offer a car at one or two percentage points lower than a competitor could prove very attractive.
“The only further point of note is that the cancellation of the September fuel duty rise is to be welcomed and will help to keep overall running costs under control as the economy continues the ongoing process of recovery.”