Fleet News

“At long last!” - fleet managers respond to company car tax changes

Changes to the company car tax regime, which will see fully electric cars not subject to any benefit-in-kind tax in 2020-2021, have received a mixed reaction from fleet managers.

The changes have also received some criticism from trade organisations ACFO and ICFM.

Using our comments section at the bottom of our original story, fleet decision-makers had the following responses:

  • Sage & Onion - 09/07/2019 16:32

At long last! Welcome news. I'm not sure I agree with the 4% penalty still being in place for cars with CO2 measured on WLTP though. And are diesel hybrid models still exempt from the 4% diesel penalty? I expect this system of two tables is going to play havoc with P11D calculations or software that calculates the BIK value.

 

  • rosco7 - 10/07/2019 09:06

Diesel hybrid models will avoid the 4% RDE2 tax if they are RDE2 compliant. And you are correct, it will be a bit challenging to have two tax tables, but at least we have something.

 

  • rosco7 - 10/07/2019 09:05

So if my calculations are correct, they have given WLTP an average 10-15% differential over NEDC. I suspect the true difference is closer to 25% and in some cases much more. Also, for those poor people who had no option but to choose a pre-RDE2 compliant diesel they could only benefit by writing off the 1-2 year old car, as they probably have about three years left on the contract. I do wonder why this took so long for the treasury to announce, it is hardly revolutionary. Anyway, too late now for the companies who have closed the car scheme and gone allowance. But I sense an opportunity for salary sacrifice on EVs

 

  • Glenn Ewen - 10/07/2019 11:44

I would argue that anyone that can make use of a pure electric car probably doesn't do enough miles per year to warrant having one, or their job is of limited in range. It encourages perk cars more than job needs. Still cart before horse as no proper infrastructure in place yet. Strikes me as a simple virtue signalling exercise with no real structured plan for the future.

 

  • rosco7 - 11/07/2019 09:25

Yes, this is the problem. As EVs are at least £7,000 more expensive (with the plug-in car grant included) than an equivalent ICE car. You can only get an equitable total cost of ownership in a high mileage scenario. However, with more realistically priced EVs and the increases in production volumes driving lower prices, as well as EU manufacturers getting close to large fines for average CO2, I can see a lot of lower cost EVs becoming available. There are some better options though. A Tesla Model 3 is fairly close on price to a BMW 3 Series, Mercedes C-Class or Audi A4, so with reduced fuel costs and low service costs, this may work. Of course our friends at the Treasury are only giving us a vision for three years, and after that there are no promises on BIK rates for EVs, so as availability increases, expect the BIK percentage to increase accordingly.

Current and future company car tax band can be viewed here.

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