Salary sacrifice specialist Tusker has welcomed the partial reprieve for cars financed through salary sacrifice arrangements and claimed that many of those now not qualifying for the tax break will not face higher charges.
In a hugely significant Autumn Statement for the company car industry, the Chancellor Philip Hammond confirmed that car benefit schemes can continue for vehicles emitting 75gkm of CO2 or less so-called ultra-low emission vehicles (ULEVs).
Tusker’s calculations show that cars above 75g/km of CO2 emissions will face a small increase in cost of typically £5 a month, with as many as 40% of cars not experiencing any increase in pricing at all. Drivers who currently have a salary sacrifice car remain unaffected by the changes, with cars delivered from April 2017 structured within the new tax system.
David Hosking, CEO of Tusker, said: “The Chancellor has listened to our evidence and protected ULEVs, endorsing them in the same way as cycle to work schemes and child care vouchers.
“Car benefit schemes are the most affordable way to get a brand new, fully maintained and insured car, something which so many UK workers are heavily dependent on. This positive step protects hard-working basic rate tax payers, who are the overwhelming beneficiaries of car benefit schemes.
“We’re especially pleased that ultra-low emission vehicles will continue to be the most tax efficient and appealing choice for employees who need a car through the scheme, in order to drive to work.”
Hosking continued: “Real driver data shows that we have opened up the company car market for those on lower salaries and are helping more people into safer, cleaner and more reliable cars. Now that the Government has announced its decision, we can continue to provide this highly sought after benefit to tens of thousands of people across the UK.”