Fleet body calls for clarity on BIK rates ahead of November’s Budget

Written by Ellie

The government needs to clarify future company car taxation rates before the Budget on November 22.

This is according to the Association of Car Fleet Operators (ACFO), which has repeatedly asked for benefit-in-kind (BIK) tax rates to be laid out regarding a vehicle’s whole operating cycle.

The fleet representative body says that recently, businesses have been forced to run company cars for longer than they would otherwise, operating them into a fourth or even fifth year.

ACFO chairman John Pryor has called for chancellor of the exchequer Philip Hammond to confirm company car benefit-in-kind tax rates for “at least 2021/22 and 2022/23” so employers and employees won’t be left in the dark over what their BIK tax bills will be in their final year or two of operation.

Mr Hammond should also tell fleets how carbon dioxide (CO2) emissions measured via the new Worldwide harmonised Light vehicles Test Procedure (WLTP) will affect company car BIK rates. The new vehicle emission and mileage testing regime will be used from September 2018 for all cars and vans.

Speaking to Fleet News, ACFO deputy chairman Caroline Sandall said: “Industry experts have suggested that CO2 figures on a car-by-car basis could increase by about 20 per cent with introduction of the WLTP, but fleet managers and company car drivers still do not know how company car BIK tax rates will be adjusted to reflect the new regime.

“Company car tax bands based on CO2 emissions under the existing testing regime have been published until 2020/21 so it makes sense to use them and then switch to WLTP.”

Fuel duty has been unchanged for many years now, but a poll of Fleet News readers found that almost half (49.5 per cent) think the chancellor could finally break that long-running freeze by upping fuel duty in the upcoming Budget.

Molly Benton, brand manager at Fuel Card Services, comments: “If this increase transpires, it would be yet another change for fleets to get used to, following the introduction of a new Vehicle Excise Duty (VED) structure and new rules for Optional Remuneration Arrangements in April, as well as the publication of the Air Quality Plan in July, with its promise of Clean Air Zones around the country.”

Photo: Tramino/iStock

Posted on 14th November 2017

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