Fleet World Workshop Tools
Car Tax Calculator
CO2 Calculator
Car Comparator
Van Tax Calculator
EV Car Comparator
BiK Rates Company Car Tax

Rising BiK is slowing demand for company cars, says BVRLA

By / 4 years ago / Latest News / No Comments

Government tax policy could be encouraging drivers to take a cash allowance and use their own vehicles instead of opting for a company car, according to the British Vehicle Rental and Leasing Association (BVRLA).

Ford Mondeo 2009

Grey fleet vehicles are likely to be older and less efficient than a company car.

The concerns are based on provisional HMRC data, which showed 950,000 employees paid company car tax in 2014/15 – that’s a 1% increase on the 940,000 in the previous year, and the first growth since 2006/7.

However, the BVRLA pointed out that this coincided with a period where the workforce grew by 500,000 people, adding that tax liability per employee had also increased. The number of people paying company car tax matched 2011/12, but they paid a combined £150m more – a 12% increase, or an average of £158 per person.

That’s before the two percentage point increase announced in the 2015 budget, and the retention of the 3% Benefit in Kind surcharge for diesels, which is paid by 82% of drivers. The BVRLA is worried that this could lead to employees using their own cars and taking a cash allowance instead, and that these are less efficient and less likely to be equipped with the latest safety technology.

BVRLA Chief Executive, Gerry Keaney, said: “Company cars are amongst the newest, cleanest and safest vehicles on UK roads, but we believe uptake is being hindered by an ever-increasing tax burden.”

For more of the latest industry news, click here.

Alex Grant

Trained on Cardiff University’s renowned Postgraduate Diploma in Motor Magazine Journalism, Alex is an award-winning motoring journalist with ten years’ experience across B2B and consumer titles. A life-long car enthusiast with a fascination for new technology and future drivetrains, he joined Fleet World in April 2011, contributing across the magazine and website portfolio and editing the EV Fleet World Website.