Commenting on today’s Budget announcement on company car tax rates, including the removal of the diesel supplement in 2016, Mike Moore, director in Deloitte’s automotive team, said: “The Government has continued the trend of using the tax system to green the UK’s business fleet.
"The Chancellor has listened to lobbying, giving certainty on the benefit in kind charge for company cars through to the tax year 20016/17 and removing the 3% diesel supplement from April 2016.
"The highest percentage that can be applied to the list price of a car will increase from 35% to 37% from April 2015.
“The car fuel benefit charge will increase from £18,800 to £20,200 from April 2012. This, along with the increase in the percentage that will be applied to car fuel benefit charge continues the objective to make free fuel an unattractive benefit.
“The Government estimates the changes along with the amendments to the capital allowance and tax relief rules will lead to an increase in the tax take in excess of £600 million on company cars. This means that businesses should seriously consider the carbon foot print of their fleet in order to control costs.”