Fleet News

Chancellor's company car tax plans criticised by ACFO

Fleet news logo

Fleet decision-makers’ trade body ACFO has voiced its disappointment about changes to company car tax announced in the Budget.

Company car drivers will face a three percentage point year-on-year hike in their company car tax from 2019/20.

But, the Government has indicated that the rates for ultra-low emission vehicles (ULEVs) will increase “more slowly than previously announced”.

John Pryor, ACFO chairman, said: “The Government is ploughing hundreds of millions of pounds into encourage the uptake of zero and ultra low emission company cars so ACFO is disappointed that benefit-in-kind tax rates on these vehicles are increasing further in 2019-20.

“Given the government’s focus on encouraging demand for electric and plug-in cars through a range of incentives, notably grants, ACFO would have expected the chancellor to reduce company car benefit-in-kind tax rates, not increase them, on these vehicles.”

ACFO believes that it would also potentially encourage company car drivers to turn to ULEVs if they paid benefit-in-kind tax on the P11D value of the vehicle after taking into account the plug-in-grant.

He continued: “Currently company car drivers receive no benefit from choosing a car that is subject to a plug-in-grant, which only benefits the vehicle owner.

“It is something that ACFO will continue to raise in its discussions with HM Treasury and HM Revenue and Customs.

“Furthermore, ACFO is also disappointed that the Budget did not clarify mileage reimbursement rates for electric and plug-in vehicles.

“Once again, it is an issue that ACFO has frequently raised in discussions with civil servants and will continue to do so.”

Login to comment


No comments have been made yet.

Compare costs of your company cars

Looking to acquire new vehicles? Check how much they'll cost to run with our Car Running Cost calculator.

What is your BIK car tax liability?

The Fleet News car tax calculator lets you work out tax costs for both employer and employee